The cleric was stabbed and shot to death by members of an "extremist" Shiite group in the Shiite holy city at the site of Imam Ali's tomb, a sacred shrine, a journalist accompanying Khoei at the time of the attack told AFP.

He said two other people were killed in the attack, which occurred a week after US forces who brought down the regime of Iraqi President Saddam Hussein helped the opposition cleric return to Najaf.

Khoei had been based in London since the crushed 1991 Shiite uprising in southern Iraq.

A statement issued by the al-Khoei Foundation, which the slain cleric headed in the British capital for the past 12 years, just before he was confirmed dead accused "agents of the dictatorial regime now on its deathbed in Iraq" of being behind the assault.

It also said that the coalition forces "bear full responsibility for preserving the lives and properties of citizens" and safeguarding security and stability in areas under their control.

But journalist Maad Fayyad, who reports for the Saudi-owned London-based daily Asharq al-Awsat told AFP by telephone from Najaf that Khoei's killers were members of an "extremist Shiite group" whose leader, also a Shiite cleric, was murdered two and a half years ago in disputed circumstances.

According to Fayyad, who was himself slightly wounded, the attack began when Khoei escorted the caretaker of the holy shrine, Haidar al-Refei, to his office in a move designed to promote reconciliation among various sides in the city.

The armed group attacked the office with guns, knives and batons, fatally shooting Maher al-Yasseri, a 33-year-old Iraqi American who recently returned to Najaf.

Fayyad, who was contacted from Dubai, said the besieged group accompanying Khoei fired only in the air before surrendering and pleading for safe passage. The assailants accepted to let them out but reneged afer they left the office and hacked Refei to death before stabbing and shooting Khoei.

A spokesman for the al-Khoei Foundation in London had earlier told AFP that the cleric had been attacked with knives while he was visiting Imam Ali's tomb.

"I knew Sheikh al-Khoei. He was resident in this country. He had huge expectations about the future of the Shiite people post-Saddam," British Foreign Secretary Jack Straw told reporters in London.

"It is an appalling tragedy that he has been killed before he can take part in that process," he said at a press conference with Kuwait's State Minister for Foreign Affairs Mohamed Sabah al-Salem al-Sabah.

A British Foreign Office spokesman called Khoei "a highly respectful leader of the Shiite community and a member of the UK Muslim community."

He added that Foreign Office Minister Mike O'Brien had spoken to his nephew Youssef al-Khoei earlier Thursday.

"Persons who were with him... said he was martyred by treacherous hands," his nephew Jawad al-Khoei was quoted as saying on the BBC teletext service.

Abdul Majid was the son of the late Ayatollah Abolqassem al-Khoei, one of the main leaders of Iraq's Shiite community during the 1991 Gulf War, who died in 1992 under house arrest.

There had been speculation that Khoei, who had called for Shiite cooperation with the United States, had gone back to Najaf with help from US forces, and that his return signaled a US attempt to promote a "pro-American" current among Iraq's majority Shiite community as Saddam Hussein's regime collapsed.

SPACE.WIRE