Emphasis on the fact that this is not a pull-out, according to their Pentagon sources. (I tend to trust Fox's sources.) Further, there are several tracks of negotiations on-going, one of which might use Iraqi troops under coalition command.
I feel I must also emphasize here that the negotiations are NOT between the Marines and the insurgents. The negotiations are between the city officials and elements of the coalition, the Iraqi governing council, and sheiks influential in the area. The idea (again now quoting Fox) is to have a peaceful resolution and neutralize the insurgents; also the Pentagon says that what we have been seeing on the TV in Fallujah is NOT a full-scale offensive, but rather targeted hits in reponse to attacks from the bad guys, which have happened despite the cease-fire.
Having re-read this story, I see that AP is basing most of it on what Tony Perry told CNN. I think that's a little too much filtering, myself.