Shi'ite rifts threaten to prolong Iraq government delay

BAGHDAD (Reuters) - Iraq's main Shi'ite-led blocs are facing serious problems in deciding on a candidate for prime minister, straining their alliance and threatening to prolong the delay in forming a government, party officials said.

The failure to forge a government 3 1/2 months after the March 7 election is fuelling public frustration and creating a political vacuum that insurgents have sought to exploit through attacks before the end of U.S. combat operations in August.

The cross-sectarian Iraqiya alliance, heavily backed by minority Sunnis, won a slim lead in the otherwise inconclusive vote, which Iraqis had hoped would set their war-scarred nation on a path to stability seven years after the U.S.-led invasion.

But a merger after the election between incumbent Prime Minister Nuri al-Maliki's State of Law and the Iraqi National Alliance (INA), dominated by parties close to Iran like the Supreme Islamic Iraqi Council (ISCI), had been expected to deprive Iraqiya of a chance to form the government.

That Shi'ite mega merger is now under threat because of the refusal of its partners to compromise on a prime minister.

A major stumbling bloc continues to be the insistence of Maliki's Dawa party that he be given a second term. An agreement by Dawa to limit Maliki's powers has not been enough to convince others to agree to his reappointment, party officials said.

"ISCI, Badr organization and Sadrists have decided not to hand the government to Maliki or the Dawa party," a senior ISCI leader said, declining to be identified. Badr is ISCI's former armed wing while the Sadrists are the followers of fiery anti-American cleric Moqtada al-Sadr. All are in the INA.

"The alliance is closer to breaking apart than to being welded together. It is really still being tested," he said.

The Sadrists, who control around 40 of the INA's 70 seats, have been adamant about rejecting Maliki, harboring rancor against him for using the army to crush their militia in 2008.

PUSHED TO THE EDGE

"Honestly, we are not there yet. But we are pushing this to the edge in order to prevent Maliki from being prime minister again," a senior Sadrist said on condition he not be identified.

The Sadrists have said they would support former interim prime minister Ibrahim al-Jaafari as a nominee.

ISCI is promoting outgoing Vice President Adel Abdul-Mahdi as its main choice, even though he is opposed by the Sadrists.

"We think our candidate Dr. Adel Abdul-Mahdi is more acceptable than anyone else to the Kurds, to Iraqiya and to regional and foreign countries," said ISCI lawmaker Kasim al-Araji, a member of the Badr organization.

Under Iraq's fledging political process, the new parliament should pick a new president and the president should select the next prime minister from the largest parliamentary bloc.

Iraqiya argues that means the prime minister should come from its ranks since it won the most seats in the election. The merged Shi'ite-led National Alliance argues it has that right as the largest group in parliament, a dispute yet to be resolved.

ISCI is now trying to persuade others to let parliament

select a prime minister from a list to be submitted by the National Alliance, ISCI leader Mohammed Mahdi al-Bayati said, while conceding the proposal was "not constitutional."

Few expected coalition talks to be quick, and August has been viewed as a likely date for government formation. But the continuing discord in the National Alliance, despite progress it had made in wooing Sunni groups, means it may take even longer.

A big question is whether Dawa, which controls 89 seats, will eventually decide its fate is more important than Maliki's.

"I suppose flexibility will be obligatory," said senior party member Ali al-Adeeb, asked if Dawa might at some point change its candidate in order to keep the premier's position.

(Editing by Michael Christie and Mark Heinrich)