Reappointed on Thursday, Maliki now has 30 days to form his cabinet, with the next parliamentary session scheduled for Saturday.

But a dramatic walk-out by some 60 MPs from the Sunni-backed bloc of former premier Iyad Allawi underscored the fragility of the deal just as it was getting inked.

International leaders however continued to laud the agreement, a bid to end an eight-month post-election deadlock.

As part of the accord, brokered during three days of intense talks, President Jalal Talabani, re-elected by MPs, named Maliki as prime minister.

But the move was overshadowed by a dispute that prompted angry members of the Iraqiya bloc to storm out of the Council of Representatives chamber.

For many, the support of Allawi's Iraqiya bloc, which narrowly won the March 7 poll and garnered most of its seats in Sunni areas, is vital to preventing a resurgence of violence.

The Sunni Arab minority that dominated Saddam Hussein's regime was the bedrock of the anti-US insurgency after the 2003 invasion.

"Last night, it was clear, there are a lot of disagreements," independent Kurdish lawmaker Mahmud Othman told AFP on Friday.

"Last night showed that the agreement is shaky," he added.

"Maybe it was signed behind closed doors, and when it came into the open, one side did not support it. If this means Iraqiya will not be participating in the government, that will create problems."

But senior Iraqiya MP Hassan Alawi, who did not walk out, said "the Iraqiya MPs (who left) will be back in parliament and the agreement will be approved."

The parliamentary session, only the second since the election, had gotten off to a good start, with Maliki and Allawi sitting side-by-side in the chamber.

But shortly after Sunni Arab and Iraqiya member Osama al-Nujaifi was chosen as speaker, verbal clashes erupted, with Iraqiya complaining the power-sharing deal was not being honoured.

Specifically, it called for three of its top members, barred for their alleged ties to Saddam's Baath party, to be reinstated before voting for a president.

When their demands were not met, dozens of lawmakers left the chamber. After some confusion, the remaining MPs began voting to re-elect Talabani.

"We boycotted the session (on Thursday) because we showed good intentions to others, but they stabbed us in the back," said Saleh al-Mutlak, one of the three members Iraqiya wanted reinstated.

"We will not return without international guarantees," he added, without elaborating.

The power-sharing deal stipulated that a Sunni Arab would hold the post of speaker, and that Talabani and Maliki would retain their posts.

It also established a statutory body to oversee security, a concession to Allawi, who had held out for months to regain the post of premier.

Iraqiya has said its participation rests on four conditions: a bill forming the security body, a committee examining cases against political detainees, codifying the power-sharing deal and annulling bans on the three Iraqiya members.

Allawi has repeatedly accused Maliki of monopolising security decisions during his first term. As far back as six months ago, US officials floated the idea of a new counterweight to the premier's office in order to break the deadlock over the top job.

US President Barack Obama on Friday hailed the agreement as a "milestone" in Iraq's history.

The government will be "representative, inclusive and reflect the will of the Iraqi people," he said in Seoul, where he was attending a G20 summit, adding that Washington had long lobbied for such a "broad-based government."

The US military, which currently has fewer than 50,000 soldiers in Iraq, is due to withdraw all of its forces by the end of 2011.

British Foreign Secretary William Hague, whose country was a partner in the US-led invasion, called the deal a "significant step forward." France also hailed what it called a "step in the right direction."

UN chief Ban Ki-moon said the deal was a "major step" and urged Iraq's leaders to "continue demonstrating the same spirit of partnership in moving swiftly to conclude the formation of a new government," his spokesman said.

The Security Council said it "encourages Iraq's leaders to rededicate themselves to the pursuit of national reconciliation" and emphasized the importance of Iraq's stability for the whole region.

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