Representatives of the Mujahedeen Khalq operating near Baqubah, 70 kilometres notrheast of the capital, struck the agreement after two days of negotiations with U.S. forces.  Their capitulation was reported by the U.S. Army's V Corps headquarters in Baghdad.

"V Corps has accepted the voluntary consolidation of the Mujahedeen Khalq forces and subsequent control over these forces," V Corps said in a statement Saturday night.  It said the process would take "several days" to complete.

It added:  "When this process is completed, it will significantly contribute to the coalition's mission that will establish a safe and secure environment for the people of Iraq."

The Mujahedeen Khalq's well-armed force, which for years fought Iran's Islamic rulers from Iraq with the backing of Saddam Hussein's regime, posed a potential challenge to the U.S.-led coalition's authority as Iraq's military occupier.

Military officials at V Corps, speaking on condition of anonymity, said the group had agreed to "voluntarily hand over all their weapons: including sidearms.  They will be permitted to retain their uniforms.

Calls to the group's Paris headquarters Saturday were answered by a recorded message saying the office was closed.

The Mjahedeen Khalq's weaponry will be consolidated into one area, its members in another.  They will be "protected by American forces," one military official said.  A rival armed group backed by the Iranian regime is active in the area, and there have been fears the two would clash.

Any travel by members of the Mujahedeen Khalq, including into Baqubah to purchase food, will be "under escort," the United States said.

The V Corps statement did not use the word surrender, and the military officials said they would not describe the capitulation in those terms.  The official said members of the organization would not be classified as prisoners of war but under a status "yet to be determined."

Saturday's capitulation, which appeared nonetheless to be a surrender in everything but terminology, underscores the U.S. desire to be the unquestioned and unchallenged armed force in Iraq a month after the fall of Mr. Hussein's government.

"Groups who display hostile intent or refuse to cooperate with the authority of the coalition will be subjected to the full weight of coalition military power," V Corps said.  "These groups are urged to submit to the authority of the coalition immediately."

The Mujahedeen Khalq, or People's Warriors, is the military wing of the Paris-based National Council of Resistance of Iran, an umbrella body said to unite Iran's diverse oposition groups.

The Mujahedeen Khalq was allied with the late Ayatollah Ruhollah Khomeini's Islamic fundamentalists during the 1979 revolution that overthrew the pro-Washington dictatorship of Shah Mohammed Reza Pahlevi.  But the newgovernment soon banned the Mujahedeen Khalq.