al-Sadr has his militia bring in hostages from the streets when he took over that one shrine mosque. He had the hostages killed, thinking the American troops would attack, so he could blame the Americans for the deaths of the 'civilians'. Troops didn't. al-Sadr murdered the innocents. So now the Iraqi Council is negotiating with him and they may let him have a position in the new government. Ain't life grand.
Could be similar in this report, considering Reuters as the source: The fire could have been set by 'insurgents' to blame the Americans.
A U.S. military spokesman said marines came under fire from around 100 insurgents near the town of Hit, about 107 miles west of Baghdad, and engaged in an hour-long firefight.
"Some of the anti-Iraqi forces took up fighting positions in a mosque," the spokesman in Baghdad said.