(Repeating interview moved on Feb 23 with no change to text)
* Sunni-Shi'ite reconciliation a failure, Hashemi says
* Sunni politician says some loopholes in oilfield deals
BAGHDAD, Feb 24 (Reuters) - Reconciliation between Iraq's once dominant Sunnis and its Shi'ite majority has failed at a political level but the country will not slide back into sectarian conflict, Iraq's Sunni vice-president said.
The parliamentary election on March 7 is seen as a potential make-or-break moment for Iraq's progress out of the shadow of war and sectarian slaughter which nearly tore the country apart after the 2003 U.S.-led invasion.
Tareq al-Hashemi, one of two vice-presidents and part of an alliance opposing Prime Minister Nuri al-Maliki in the vote, said an attempt to reconcile Iraq's Shi'ites and the Sunnis who dominated under Saddam Hussein had not succeeded.
"(Reconciliation) is one of the projects that the government has failed at unprecedentedly and ... the reason is that there is no real intention for national reconciliation. There is no real will for reconciliation," Hashemi told Reuters on Monday.
The country is a far cry from the dark days of sectarian killings that peaked in 2006-07 and has seen violence fall in the last two years, but attacks are still common and some fear a rise in bombings and shootings in the lead up to the vote.
"Iraq has left behind the possibility of slipping back into civil war of a sectarian nature, Hashemi said. "This is over."
He said that while sectarian tendencies remained, the problems in Iraq were no longer between ordinary people but among the political elite.
"Despite the improvement ... security is still fragile and could deteriorate at any moment. We should be careful until the country recovers," he said.
Sectarian tension has risen since a ban was announced on candidates alleged to have ties to Saddam's outlawed Baath party, which aroused Sunni fears of a plot by Shi'ites to marginalise them before next month's vote.
Senior Sunni politician Saleh al-Mutlaq, who has been banned from running in March and was an ally of Hashemi's, has withdrawn his party from the ballot. [ID:nIBR022548]
Hashemi, who teamed up with Mutlaq and former Prime Minister Iyad Allawi in the nationalist Iraqiya alliance, said the ban was politically motivated and designed to undermine his coalition's chances in the ballot.
After years of decline, Iraq has been trying to revamp its dilapidated economy and boost oil production with a series of deals that could turn it into a leading oil producer.
Hashemi said he had reservations about some contracts signed with foreign oil companies in two oilfield auctions last year, but he gave no details.
"There are some legal loopholes in these contracts that should be dealt with. I am in favour of opening Iraq to foreign investment but on condition that oil wealth is not to be exploited for too long a time," he said. (Writing by Rania El Gamal; Editing by Jack Kimball and Andrew Dobbie)
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