By Mariam Karouny

BAGHDAD, Oct 6 (Reuters) - Iraq's two most powerful Shi'ite leaders have signed their first written agreement, pledging to prevent bloodshed by working together to avoid confrontation, Iraqi officials said on Saturday.

Supporters of Moqtada al-Sadr and Abdul Aziz al-Hakim's Supreme Iraqi Islamic Council (SIIC), the two biggest Shi'ite blocs in parliament, are locked in a power struggle for control of towns and cities in the predominantly Shi'ite south.

The factions have clashed more often this year throughout the south, areas where U.S. forces have little or no presence. Political analysts fear the struggle for dominance will intensify ahead of provincial elections expected next year.

"Sayyed Abdul Aziz al Hakim and Sayyed Moqtada al-Sadr have agreed on the necessity of preserving and respecting Iraqi blood under any condition," said the agreement signed by Hakim and Sadr, which was seen by Reuters.

Shi'ite officials said the deal was aimed at preventing clashes similar to those in Kerbala, southwest of the capital, in August.

At least 52 people were killed when Sadr's Mehdi Army clashed with police linked to Hakim's rival Shi'ite political movement, the SIIC and its Badr Organisation.

The police in many southern towns are seen to be loyal to Badr. Two SIIC governors of southern provinces were assassinated in August.

Last month, the political movement loyal to Sadr in parliament pulled out of Prime Minister Nuri al Maliki's United Alliance in which it has the same number of seats as Hakim's grouping.

Sadr suspended armed action by the Mehdi Army for up to six months after the Kerbala violence. His aides have said the order was to let him weed out rogue elements in the militia.

The agreement between Hakim and Sadr recommended forming committees in all provinces to bring the two groups' views together and to manage problems.

"This deal could be seen as the first step towards preventing clashes and fighting between the two groups, specially after the Sadrists pulled out of the Alliance," a Shi'ite official in the Alliance told Reuters.

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