Two of
Radical cleric Moqtada Sadr and Abdul Aziz al-Hakim, head of the Supreme Islamic Council of Iraq, have been locked in a bitter dispute for months.
The leaders have agreed to try to end further bloodshed, foster a spirit of goodwill and form joint committees throughout the country.
A number of recent attacks in southern
'Iraqi unity'
In a statement, the two leaders said their aim was to maintain both the Islamic and the national interest.
"The agreement is essentially a commitment of honor," a spokesman for Sadr's group Liwa Sumaysim told Agence France-Presse news agency.
"The most important aspect is that it forbids both sides to engage in bloodletting against each other and against Iraqis in general."
A spokesman for Mr Hakim's group, Hamid al-Saadi, said: "
The two leaders also say their groups will co-ordinate their media and cultural efforts.
The BBC's Jon Brain in
Mr Hakim's Supreme Islamic Council of Iraq, formerly the Supreme Council for the Islamic Revolution in
Moqtada Sadr came to prominence after the US-led invasion in 2003 and leads a movement that is backed by his own armed militia, the Mehdi Army.
The cleric ordered the suspension of the militia's activities in August.
However, he has since boycotted the government and withdrawn his six ministers.
BBC correspondent says that despite the new mood of rapprochement, Moqtada Sadr has given no indication that his group plans to return to the ruling alliance.
PHOTO CAPTION
Abdul Aziz al-Hakim and Moqtada Sadr