* Speaks for Sistani, most revered Shi’ite cleric
* All factions should be involved in talks, cleric says
BAGHDAD, June 18 (Reuters) - A senior Iraqi Shi’ite cleric called on Friday for politicians to speed up efforts to form a government after an inconclusive election in March, and said all factions should be included in the talks.
Abdul-Mahdi al-Kerbalai, who was speaking during Friday prayers in the holy city of Kerbala, is a representative of Iraq’s most revered Shi’ite cleric, Grand Ayatollah Ali al-Sistani, and often delivers sermons for him.
No party won the March 7 parliamentary election outright, but a cross-sectarian alliance heavily backed by minority Sunnis came out two seats ahead of incumbent Prime Minister Nuri al-Maliki’s Shi’ite-led State of Law coalition.
Negotiations have yet to produce an agreement on a new government more than three months after the vote, and parliament only this week held its inaugural session.
Suspected Sunni Islamist insurgents and other violent groups have sought to exploit the political vacuum through bombings and assassinations to reignite sectarian violence, raising questions about U.S. plans to end combat operations in August.
"The discussions (between the political blocs) must be intensive," Kerbalai told worshippers in what was widely perceived as a message from Sistani, who has enormous influence over Iraq’s Shi’ite majority.
"All the political blocs must show flexibility in their demands," he said. "Also, the involvement of all Iraqi political factions should be considered in the serious dialogue because they represent the Iraqi community, so they all must be involved, with none being ignored or eliminated."
The cross-sectarian alliance headed by former Prime Minister Iyad Allawi, a secular Shi’ite, won 91 seats in the new 325-seat parliament, against 89 for Malaki’s Shi’ite-led State of Law.
Allawi insists his Iraqiya coalition has the right to form a government but State of Law merged after the election with the other main Shi’ite-led group, the Iraqi National Alliance, and is now just four seats short of a working majority.
Any attempt to completely sideline Iraqiya could anger the Sunni voters who backed it, and reinvigorate the Sunni-led insurgency just when overall violence has fallen sharply and the country is attracting serious investment in its oilfields. (Reporting by Khalid al-Ansary in Baghdad and Khaled Farhan in Najaf; Writing by Michael Christie; Editing by Jon Boyle)