DUBAI, June 6 (Reuters) - A key Iraqi militant group said on Wednesday it had reached a ceasefire deal with Iraq's wing of al Qaeda to end clashes between the two Sunni insurgent groups waging a violent campaign against U.S.-led forces in Iraq. "A deal has been reached between the Islamic Army in Iraq and al Qaeda in Iraq that stipulates an immediate end to all military operations between the two sides in all sectors including capture operations," the Islamic Army in Iraq said in a statement. The two groups -- among the main ones fighting U.S.-led coalition forces in Iraq -- have exchanged accusations over killings and the Islamic Army in Iraq had accused al Qaeda of seeking to dominate through its self-styled Islamic State in Iraq. Earlier this month Qaeda fighters fought fierce battles with rival Sunni Arab insurgents in a Baghdad district. It was the first time growing tensions between al Qaeda and other Sunni insurgent groups had exploded into open warfare on the streets of Baghdad. The statement, carried on a Web site used by militants including al Qaeda, said the two sides had agreed to form a "judicial committee to look into pending issues between the two sides". The Islamic Army of Iraq has repeatedly said it was a Sunni Muslim group fighting "occupation forces" and vehemently denies a perception that it is dominated by former army officers and supporters of the Baath party of executed former President Saddam Hussein. Al Qaeda, which relies on local and foreign fighters, is seen by the United States as the main reason of instability in Iraq.