BAGHDAD, April 9 (Reuters) - Shi'ite cleric Moqtada al-Sadr has threatened to revoke a 7-month-old truce imposed on his Mehdi Army militia. His warning came a day after Prime Minister Nuri al-Maliki said Sadr's followers would be barred from elections unless the cleric disbanded the militia.

Following are answers to questions about the showdown:

WHAT COULD BE THE CONSEQUENCES?

It raises the prospect of worse fighting after battles late last month killed hundreds. An outbreak of large-scale fighting would draw in more American troops at a time when U.S. force levels are being cut. Big battles in Baghdad and the Shi'ite south could put an end to any more major U.S. drawdowns until a new U.S. president has taken office in Washington in 2009.

"If Maliki tries to enforce the threat and the Sadrists feel they will be excluded (from the political process), they could abandon the ceasefire. It is a high-risk strategy," said Joost Hiltermann, an Iraq expert at the International Crisis Group.

Provincial elections are due by October and Sadr's movement, which boycotted the last local poll in 2005, is expected to make gains at the expense of Shi'ite parties supporting Maliki. Any fighting in the run-up to the elections could prompt calls for a delay, something that might suit the Shi'ite parties in power.

WOULD MALIKI CARRY OUT HIS THREAT?

Maliki has threatened to crack down on militias before but never followed through. While he shows little sign of buckling now, how he would actually stop Sadr's millions of followers from taking part in elections remains to be seen. Legislation for the provincial elections is being drafted and might contain a provision banning parties with militias from taking part. But other parties have militias, so fairness would be a key issue.

If the Sadrist movement was left off the electoral slate, that might be the trigger for the cleric to scrap the ceasefire.

WHAT ABOUT SADR'S NEXT MOVE?

In a statement on Tuesday, Sadr said he would end the truce if needed. That would be welcomed by Mehdi Army fighters, who have chafed under the truce.

Aides also say Sadr would disband his militia if top Shi'ite religious leaders demanded it. Politicians said that tactic was a smart move, arguing the clerical establishment would also have to order other parties to disband their militias.

"Moqtada al-Sadr wants to put the ball in the other team's court," said Ahmed al-Musadi, a legislator from Sadr's movement.

WOULD SADR EVER DISBAND THE MEHDI ARMY?

It's highly unlikely he would do it unilaterally. The Mehdi Army gives him muscle on the streets. Disbanding the militia at a time when there are still 160,000 U.S. troops in Iraq would also be seen as weakness, given his long-stated call for all American soldiers to leave the country.

"The Mehdi Army might disappear or change its logo, but will never lay down its arms," said Iraqi analyst Hazem al-Nuaimi.

WHY ARE PROVINCIAL ELECTIONS IMPORTANT?

Sadr's movement and Sunni Arabs boycotted the last provincial elections in 2005, although they took part in later parliamentary polls. Given Sadr's support base, his movement should do well in the Shi'ite south against parties backing Maliki, who have been accused of doing little to improve life in a part of Iraq spared the worst of recent sectarian carnage.

Sunni Arabs are under-represented where they are numerically dominant and Washington hopes their participation will increase their involvement in the political process. Sadr's aides say the current crackdown on the Mehdi Army is aimed at weakening his movement ahead of the polls. The government denies this.

HOW MUCH SUPPORT DOES MALIKI HAVE?

Iraq's political leaders cast aside sectarian differences on Saturday and rallied behind Maliki. A body representing top leaders and most political blocs urged all parties to disband their militias. They did not mention any group by name, but the target was clearly Sadr. Sadr's bloc rejected the statement.

"(Taking on Sadr) is risky, but I think the very positive thing we have seen is that the political leadership has reached a consensus that this is the time to take that risk," said a U.S. official in Baghdad. (Reporting by Noah Barkin, Khalid al-Ansary, Ahmed Rasheed, Wisam Mohammed and Dean Yates, Writing by Dean Yates)

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