Iraq polls possible after law ratified

BAGHDAD (Reuters) - Iraq's presidential council paved the way for provincial elections on Wednesday when it signed a law seen by Washington as crucial to helping reconcile the nation's factions.

The three-member presidency council said it had approved the provincial powers law which had been held up over objections by Vice President Adel Abdul-Mahdi.

It came the day after Vice President Dick Cheney, on a visit to Iraq on the eve of the fifth anniversary of the war, praised what he called "phenomenal" political and security improvements.

The war has cost the United States $500 billion since the U.S.-led invasion to topple Saddam Hussein began in March 2003 and is a major issue in November's U.S. presidential election.

Tens of thousands of Iraqis have been killed and millions more displaced, with almost 4,000 U.S. soldiers killed.

Washington has been urging Iraq's Shi'ite-led government to take advantage of security gains and make progress on a series of so-called reconciliation benchmarks but many of the laws have been stalled by factional infighting.

The provincial powers law will define the relationship between Iraq's 18 provinces and the central government and is seen by Iraqi officials as an important first step towards holding provincial elections, due by October 1.

Baghdad and Washington see those polls as a way to draw disenfranchised Iraqis, particularly minority Sunni Arabs who were dominant under Saddam, into the political process and away from the insurgency and sectarian violence.

Many Sunni Arabs boycotted provincial elections in 2005, leaving them with little representation in regional governments now dominated by Shi'ites and minority Kurds.

"The presidential council has decided to withdraw its objections on the provincial powers law," the council, which last month sent the law back to parliament for revision, said in a statement.

MORE AMENDMENTS

It gave no explanation why the objections had been withdrawn but the statement said the presidential council would work with parliament on further amendments.

Abdul-Mahdi, a Shi'ite, sits on the council with President Jalal Talabani, a Kurd, and Sunni Arab vice-president Tareq al-Hashemi. The council must ratify all laws passed by parliament before they can be enacted.

Abdul-Mahdi had objected to the law over the right of the central government to remove provincial governors and to dissolve provincial governments.

The provincial powers law was one of three passed by parliament on February 14, including the 2008 budget and an amnesty law that could lead to the release of thousands of mainly Sunni Arab prisoners from Iraqi custody.

Washington hailed the passage of the bills as a major breakthrough and a boost for reconciliation, particularly between Shi'ites and Sunnis, Iraq's main Muslim sects.

U.S. officials in Baghdad also see the provincial powers law as one way to help clear a logjam of other laws, including a vital oil law which will determine how revenues from Iraq's vast oil reserves are distributed.

That law remains deadlocked over disputes between Baghdad and regional leaders.

The United Nations envoy to Iraq, Staffan de Mistura, said on Saturday that Iraq's leaders were not doing enough to match security gains with political progress.

Attacks across Iraq have fallen 60 percent since last June, the U.S. military says, when a build-up of 30,000 extra U.S. troops was completed, but deep divisions remain among the nation's political leaders.

On Wednesday, a two-day reconciliation conference in Baghdad ended with no major announcements or recommendations after boycotts hit the poorly attended event.

Prime Minister Nuri al-Maliki had called the meeting Iraq's "lifeboat" but it began to unravel before it began on Tuesday when the Accordance Front, the main Sunni Arab bloc, and other parties withdrawing.

The Front pulled out of Maliki's government last August over long-standing grievances it says remain largely unanswered. These include greater representation for Sunnis in government and a larger say in security matters.

(Writing by Paul Tait)