Sadr's troubles are rooted in the fighting between his militia and Iraqi security forces that erupted in March after Prime Minister Nouri Maliki ordered the army to clear the militia's strongholds in the southern city of Basra. The clashes there ended only when Sadr commanded his militia to stand down, and then did the same in Sadr City six weeks later.As Kevin Drum wrote, we do not have enough information on what exactly happened in Basra in March and how strong Sadr really is before we start making judgments on his long term strength. But there is one thing for sure; it is much harder to build a Hezbollah-like organization in a country that is ruled by fellow Shiites than a country like Lebanon that has been ruled by Christians, Sunni Muslims (who despise Shiites as poor and uneducated in Lebanon) and from time to time Israeli invaders. Hezbollah succeeded by being the only organization that defended Lebanese Shiites, in an environment where they had almost no access to "legitimate" power. Iraq would appears to be different; I have no doubt that Maliki is trying hard to integrate Shiite from Sadr's area into the government's patronage system, undercutting Sadr's influence. I do not believe that the Hezbollah strategy will be any effective in such an environment; although it might become powerful if Sunni were to take over the government again.
The cleric's retreat was hailed as a victory for Maliki. Former Sadr supporters expressed relief at the end of the fighting and resentment toward the Mahdi Army for endangering them.
With his armed wing formally frozen, Sadr looked to repair his movement's image. He announced in June that his fighters should form a new social and religious education organization, named Mumahidoon, which aims to teach Iraqis about Islam.
"To avoid having his organization continually targeted, he had to do something with them, so he followed the Islamic Brotherhood and Hezbollah model," a U.S. military intelligence officer said, referring to other Islamist movements that provide charitable services and enjoy popularity in the Arab world.
But Muqtada Sadr has surprised observers of the region before, so I wouldn't count him out just yet.