Shortly after lawmakers managed to elect a new parliamentary speaker, a dispute erupted in the Council of Representatives chamber when the mostly Sunni-backed Iraqiya bloc argued that the agreement they had signed on to was not being honoured, prompting the bloc's MPs to storm out.

The deal, clinched after three days of high-pressure talks, saw a Sunni Arab chosen as speaker, with Prime Minister Nuri al-Maliki, a Shiite, and President Jalal Talabani, a Kurd, likely to retain their posts.

It also established a statutory body to oversee security as a sop to former premier Iyad Allawi, who had held out for months to take the job from Maliki after his Iraqiya bloc narrowly won most of the seats in the March 7 election.

But after Iraqiya MP Osama al-Nujaifi was named speaker, the bloc's lawmakers walked out of the parliamentary chamber in the dispute over the power-sharing deal.

Specifically, Iraqiya had called for three of their lawmakers, barred for their alleged ties to Saddam Hussein's Baath party, to be reinstated before voting for a president.

When their demands were not met, some 60 MPs left the chamber.

After some confusion, the remaining lawmakers began voting on whether or not to re-elect Talabani as president.

Government spokesman Ali al-Dabbagh said Maliki would not be formally named premier until after the Eid al-Adha holiday, which ends on November 20.

Iraqiya has said its participation hinged on four conditions: a bill forming the security body; examination by a committee of cases against political detainees; the codifying of the power-sharing deal; and annulling bans against three Iraqiya members for their alleged ties to Saddam Hussein's Baath party.

It said it "hoped it would not be obliged to change its decision to participate in the political process if these conditions are not met."

The backing of Iraqiya, which won most of its support among the Sunni Arab minority that dominated Saddam's regime and has been the bedrock of the anti-US insurgency since the 2003 invasion, was seen as vital to prevent a resurgence of violence.

Kurdish politician Massud Barzani, who brokered the deal, paid tribute to Iraqiya for concessions that had made it possible, and said he hoped Allawi would now agree to head the new National Council for Strategic Policy (NCSP).

Iraqiya MP Mustafa al-Hiti told AFP that US President Barack Obama had "telephoned Allawi to confirm to him that the NCSP would be a decision-making body and that that the law creating it would be voted on before the formation of a new government."

Allawi had repeatedly accused Maliki of monopolising security decisions during his first term.

As long as six months ago, US officials floated the idea of a new counterweight to the power of the premier's office as a way of breaking the deadlock over the premiership.

Hiti said Saleh al-Mutlak, a secular Sunni member of the previous parliament barred from standing for re-election for alleged links to Saddam's Baath party, would replace Kurdish incumbent Hoshyar Zebari as foreign minister.

Barzani, president of the autonomous Kurdish region in northern Iraq, had said he expected Washington to endorse the deal, and later on Thursday the White House welcomed it as a "big step forward."

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

During the coalition talks, Allawi had accused Iran of putting unwarranted pressure on Iraqi leaders to keep the incumbent in office, while Maliki in turn accused the ex-premier of pandering to Sunni Arab states, notably Saudi Arabia.

"I cannot deny there has been regional and international pressure. Often it took the form of conversations and suggestions, but sometimes it amounted to pressure," Barzani said.

Wednesday night's hard-won agreement set the scene for an end to a months-long power vacuum that also saw growing violence.

Most recently, a string of anti-Christian bombings on Wednesday killed six people, days after a hostage-taking at a Baghdad cathedral by Al-Qaeda gunmen that killed 44 worshippers and two priests.

Scores of people have also been killed in bomb attacks this month on Shiite cities and neighbourhoods across central and southern Iraq.

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