(Recasts with comments by foreign minister)
BAGHDAD, April 13 (Reuters) - Iraq's cabinet has agreed a draft law on provincial elections that bans any party from the polls if they have militias, officials said on Sunday, a move that could inflame tensions with Shi'ite cleric Moqtada al-Sadr.
Foreign Minister Hoshiyar Zebari said the draft had set Oct. 1 as the election date. The law would be given to parliament for approval "very soon", he told Reuters after a cabinet meeting.
Last week Shi'ite Prime Minister Nuri al-Maliki threatened to bar Sadr's movement from the elections if he did not disband the Mehdi Army militia, which has fought battles with security forces in the cities of Basra and Baghdad in recent weeks.
Sadr in response threatened to scrap a 7-month ceasefire on his militia. The truce has been credited with helping curb violence across Iraq despite the recent clashes.
Zebari said Sadr was not the target of the provision on militias in the draft law, adding it applied to all parties.
"It's absolutely crystal clear. It says any parties that enter this election should not have or should not retain any paramilitaries or militias operating outside the law," he said.
Government spokesman Ali al-Dabbagh told a news conference that parliament would have 90 days to pass the law.
Political analysts say the local elections will be the battleground for a fierce power struggle -- especially among majority Shi'ites -- that could redraw Iraq's political map.
Major players such as Sadr's movement and Sunni Arab tribal groups will be competing for the first time and are expected to make gains at the expense of those now in power.
VOTING ON DIFFERENT DAYS?
Zebari said the elections could be held on different days or postponed in some provinces for security reasons. But the government hoped to conduct the poll in one day, he added.
"It depends on security conditions in certain provinces. The cabinet has retained the right that if it feels security is not conducive in province X, so it could be held later," he said.
"We can postpone it for a while until the situation is conducive."
Washington says the elections will foster national reconciliation by boosting the participation of minority Sunni Arabs in politics. Sunni Arabs, who boycotted the last local elections in January 2005 along with the Sadrists, are under-represented in areas where they are numerically dominant.
But many fear conflict in the Shi'ite south, where the Sadrists and the Supreme Islamic Iraqi Council, which backs Maliki, are vying for influence in a region home to most of Iraq's oil production.
The Sadrists have accused Maliki of using a crackdown on the Mehdi Army to try to weaken the movement ahead of the election. Maliki has said he was targeting criminal gangs.
While Sadr's movement snubbed the provincial elections in 2005, it took part in parliamentary polls later that year and backed Maliki's rise to power. Sadr split with Maliki in 2007 over the prime minister's refusal to set a timetable for the withdrawal of U.S. troops from Iraq.
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