REFILE-Powerful Iraqi Shi'ite cleric Sadr girds for political comeback

(Removes extra letter in analyst's name in paragraph 18)

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Sadr's return may threaten dominance of Iran-backed factions

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Fought US troops, commands loyal following among pious, poor

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Return in elections next year could shake relative stability

By Timour Azhari and Ahmed Rasheed

NAJAF, Iraq, May 12 (Reuters) - Powerful Iraqi Shi'ite Muslim cleric Moqtada al-Sadr is laying the groundwork for a political comeback two years after a failed and ultimately deadly high-stakes move to form a government without his Shi'ite rivals, multiple sources said.

His return, likely planned for the 2025 parliamentary election, could threaten the growing clout of rivals including Iraqi Shi'ite parties and armed factions close to Iran, and undermine Iraq's recent relative stability, observers say.

However, many among Iraqi's majority Shi'ite population are likely to welcome Sadr's re-emergence, especially his masses of mostly pious and poor followers who view him as a champion of the downtrodden.

Reuters spoke to more than 20 people for this story, including Shi'ite politicians in Sadr's movement and in rival factions, clerics and politicians in the Shi'ite holy city of Najaf, and government officials and analysts. Most spoke on condition of anonymity to discuss sensitive matters.

"This time, the Sadrist movement has stronger plans than the last time round to win more seats in order to form a majority government," a former Sadrist lawmaker said, though the final decision to run has not officially been made.

Sadr won the 2021 parliamentary election but ordered his lawmakers to resign, then announced a "final withdrawal" from politics the next year after rival Shi'ite parties thwarted his attempt to form a majority government solely with Kurdish and Sunni Muslim parties.

A dominant figure in Iraq since the 2003 U.S.-led invasion, self-styled nationalist Sadr has railed against the influence of both Iran and the United States in Iraq.

Iran views Sadr's participation in politics as important to maintaining Iraq's Shi'ite-dominated political system in the long term, though Tehran rejects his aspirations to be recognised as its single most dominant force.

The United States, which fought Sadr's forces after he declared a holy war against them in 2004, sees him as a threat to Iraq's fragile stability, but also views him as a needed counter to Iranian influence.

Many Iraqis say they have lost out no matter who is in power while elites siphon off the country's oil wealth.