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Biden presses Iraqis to agree on oil, land

ARBIL, Iraq (Reuters) - U.S. Vice President Joe Biden pressed leaders of semi-autonomous Iraqi Kurdistan on Thursday to compromise on the potentially explosive issue of how to manage and share the country’s vast oil wealth.

U.S. Vice President Joe Biden (L) shakes hands with Iraq's Prime Minister Nuri al-Maliki after a joint media conference in Baghdad September 16, 2009. REUTERS/Iraqi Government/Handout

Biden said he did not expect the long-running feud over land and oil between Iraq’s minority Kurds and its Shi’ite Arab-led government in Baghdad, seen a main threat to its fragile stability, would be settled before national polls in January.

“I am convinced there is good faith and a genuine desire to reach a fair compromise,” Biden said, giving no specifics from meetings with Iraqi President Jalal Talabani, a Kurd, and Masoud Barzani, president of the Kurds’ northern enclave.

Still, there are few signs that Kurds, who have long dreamed of their own state and hope to expand the borders of their northern region, or the government of Prime Minister Nuri al-Maliki, a Shi’ite Arab, are ready to back down anytime soon.

Before Biden flew to the Kurdish capital Arbil on the third day of his Iraq visit, a top U.S. administration official said Biden would repeat to Kurds what he told Iraqi leaders in Baghdad a day earlier -- it was in the interest of all Iraqis “to accept a slightly smaller piece of a much larger pie.”

Biden has also used the Iraqi visit, his second within three months, to urge passage of critical hydrocarbon legislation held up by Kurd-Arab feuding for years.

The laws would lay out a legal framework for oil firms investing in Iraq’s oil sector, which has the world’s third largest reserves but needs foreign cash to boost production.

Who has the authority to sign oil deals is just one of the sticking points between Kurdistan and the Iraqi Oil Ministry.

Biden, who once proposed splitting Iraq into separate regions for Sunni Arabs, Shi’ite Arabs and Kurds, arrived in Baghdad on Tuesday to urge greater political unity for Iraq as the Obama administration turns its attention to Afghanistan.

LINGERING VIOLENCE IN MIXED AREAS

While overall violence has fallen sharply, lingering tensions between once dominant Sunnis, majority Shi’ites and ethnic Kurds still threaten to destabilize Iraq.

Much of the violence in Iraq is now found in areas where Arabs, Kurds and other minorities co-exist, such as Kirkuk, the oil-producing city Kurds want to absorb into their region.

Some fear the row could trigger fresh fighting just as Iraq recovers from years of sectarian bloodletting unleashed by the 2003 U.S.-led invasion, which killed tens of thousands.

“In truth some of the more difficult problems are always difficult to solve in the midst of an election cycle,” Biden told reporters traveling with him before leaving for Arbil.

“So, a number of the problems, whether it is the oil law or some of the disputed internal boundaries, are going to have to wait for final resolution until the election.”

But leverage from the United States and United Nations on such issues is waning along with the dwindling foreign military presence ahead of a full U.S. withdrawal by the end of 2011.

Biden said this trip gave him a more positive outlook on Kurd-Arab relations than he got last time.

“There were a whole range of uncertainties that existed two months ago when I was here that haven’t been resolved, but a process has been put in motion that leads me to believe all the parties are seized with the need to resolve.”

The Obama administration needs Iraq to be strong and stable if it is to wind up the U.S. presence on schedule. The election next year, which some fear could be a catalyst for more violence, is viewed as key to determining whether Iraq manages to establish a peaceful democracy.

Reporting by Ross Colvin; Writing by Tim Cocks and Ross Colvin; Editing by Missy Ryan and Jon Boyle

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