NAJAF, Iraq -- While Iraq's Shiite Muslims wept and wailed over the loss of Ayatollah Mohammed Baqir al-Hakim, killed last week in a massive car-bomb explosion, leading Shiite clerics huddled in the basements of this holy city's complex of seminaries and libraries. Even as al-Hakim's remains were brought to the gates of the Imam Ali mosque, they spoke in hushed tones beside the golden shrine inside.

"A fierce competition is taking place," said Loulouwa al-Rachid, an analyst of Iraq's Shiite community for the International Crisis Group, a public policy think tank. "The main question is who will lead the Friday prayers at the Imam Ali mosque in Najaf."

The stakes -- for both Iraqis and the U.S.-led occupying authority -- are high.

The Aug. 29 killing of al-Hakim has thrown Iraq's majority Shiite population into crisis and set off a potentially explosive succession battle over control of the holiest Shiite site in Iraq. Moderate factions relatively amenable to temporary U.S. rule are vying against militants openly hostile to any American role in governing Iraq.

"The privileges are moral and political," said Sheikh Hassan al-Zergani, a cleric who preaches in the poor Baghdad neighborhood of Sadr City. "The many religious leaders who pray at the Imam Ali shrine implicitly accept the Friday prayer leader as their superior."

Devout Shiites must choose a cleric as a "marja," or source of emulation. They follow their marja's orders on everything from personal hygiene to declarations of violent struggle. Al-Hakim, despite his close ties to the anti-American clerical leadership in Iran, wound up allowing his political organization to participate in the U.S.-backed Governing Council, on which his brother, Abdel-Aziz al-Hakim, serves.

William Beeman, an anthropologist who heads the Middle East Studies Department at Brown University in Providence, R.I., said Najaf "is rapidly becoming the Vatican of Shi'ism, a role that had been taken over" by religious cities in Iran during the secular rule of deposed Iraqi President Saddam Hussein. "Anyone preaching at the Ali mosque is going to be listened to with special acuteness by the body of believers," Beeman said.

Najaf's ongoing power struggle pits moderate, middle-class followers and clerics aligned with the Hakim family against younger, poorer and more-militant followers of a young clerical student named Moqtada al-Sadr and his clique in the continuation of a decades-long rivalry. "It's a clash between two clerical families: the Hakims and the Sadrs," al-Rachid said.

Both groups claim to have suffered under Saddam's rule. Al-Hakim says he has lost over 50 relatives in the fight against the former leader. Al-Sadr's father, who was a renowned ayatollah, as well as two of his brothers were killed by Saddam's henchman.

Both groups claim to speak for the majority of the Iraqi people. And in the wake of the Aug. 29 car bombing that killed at least 85 people outside the mosque, both have begun arming themselves in the name of protecting Iraq's holiest sites.

Saddam banned Friday prayers at the Imam Ali mosque, just one of the many steps he took to stifle Iraq's restless and rebellious Shiites, who number perhaps 15 million in a nation of 25 million people.

Mohammed Baqir al-Hakim, in exile in Iran for 23 years, entered Iraq with a splash in May and grabbed control of the vacant pulpit at the mosque in a flurry, to the chagrin of some and the relief of others. Although he had spent most of the Saddam years abroad, he had the stature to bring stability to the leadership of Najaf.

"Hakim was both religiously and politically qualified for the job," said Naseer Kamel Chaderji, a Sunni member of the Governing Council, whose wife hails from a well-known Najaf Shiite family.

No one seriously believes that the young Sadr, who has yet to complete his religious studies, could take the helm at the Imam Ali mosque. But some fear that the outspoken seminary student would try to use his family connections to bolster his faction's control of Najaf and pave the way for the arrival of his mentor, Ayatollah Kadhem Husseini Ha'eri, an ultra-conservative Iraqi cleric now based in the Iranian seminary city of Qom.

Despite attempts at restraint, the Sadr and Hakim camps frequently lash out at each other in newspapers and in public. Al-Sadr's followers have shown contempt for other, more established clerics, including the popular Ayatollah Ali Sistani. Al-Sadr's faction calls him week, fragile and unable to stand up to the U.S. occupation, which they vehemently and vocally oppose.

In a rare interview earlier this summer, al-Sadr argued that al-Hakim had little popular support. He said al-Hakim's military force, the Badr Corps, had promised to stage an uprising after his father was killed in 1999, but they didn't follow through. "After this happened, we lost trust in them," al-Sadr said. "Since the people don't trust him, I also do not trust him."

The Hakim family's followers are openly contemptuous of al-Sadr. "He's a young man who hasn't finished his religious studies," said Ali al-Abudi, a Baghdad spokesman for al-Hakim's Supreme Council for the Islamic Revolution of Iraq. "He's trying to use his family name to get ahead."

But it is al-Sadr's salty speech and lack of clerical training that help him connect with the masses of poor, young, alienated Shiites, al-Rachid said. He's known popularly as the marja for the "Break-iya" -- gangs of young thugs with crewcuts who used to cause trouble in Baghdad's streets and were interested in break-dance culture.

His father, Grand Ayatollah Muhammad Sadiq al-Sadr, was also famous for connecting with the people, addressing their day-to-day concerns about the cost of living and social ills rather than expounding on theological questions, al-Rachid said.

Leaders of Iraq's Shiite community worry about a factional fight between the two camps, both of which claim to represent the Hawza, Najaf's seminary and incubator of Shiite thought. The Najaf provincial government is attempting to establish a 400-person armed and uniformed security force specifically to protect the city's holy sites.

Few believe that al-Sadr's camp had the skills or cold-bloodedness to undertake the Aug. 29 car bombing. But his followers are believed to be responsible for the April 10 killing of Abdul Majid al-Khoi, a U.S.-backed cleric who was stabbed to death outside the Imam Ali mosque.

"The situation is very dangerous now," al-Zergani said.

Iraq's fledgling government has been shaken to the core by al-Hakim's death. His brother, the Governing Council member, blamed the United States for the bombing because it failed to provide sufficient security. He demanded a U.S. troop withdrawal from Iraq.

Mohammed Bahr al-Uloum, a leading Shiite ayatollah, suspended his membership on the Governing Council, he said in an interview, in part to concentrate on helping to choose a successor to al-Hakim.

Shiite scholar Muwaffak al-Rubayee, another Governing Council member, suggested that the Grand Ayatollah Mohammad Saeed al-Hakim, a relative of the slain cleric, could take over." There are discussions going on, but they're peaceful," he said. "The important thing is that people are calling for calm. The debate is not being conducted with guns."