(Adds quote from U.S. embassy) By Waleed Ibrahim BAGHDAD, Aug 6 (Reuters) - Iraq's parliament failed to reach agreement on an elections law on Wednesday, likely delaying into 2009 local polls that the United States and United Nations have pushed hard to be held as soon as possible. The passage of Iraq's provincial elections law would have paved the way for the elections seen as a key test of Iraq's fledgling democracy and which Washington hopes will spur reconciliation between rival political groups. Lawmakers met on the eve of parliament's summer recess in the hope of finding a compromise on the law, which has been bogged down by a long-standing dispute over the status of the oil-rich city of Kirkuk in Iraq's north. Kurds, who regard Kirkuk as their ancestral home, want to include the city in their largely-autonomous Kurdish region. The city's Arabs and ethnic Turkmen want it to remain under central government authority. The controversy has exposed deep political fissures as Iraq seeks to build on a sharp drop in violence five years after the U.S.-led invasion to topple Saddam Hussein. U.S. President George W. Bush has phoned political leaders in recent days and the United Nations has proposed compromise steps to defuse tensions. "The United States regrets that the Iraqi parliament today adjourned without finishing its work on a local elections law," said a U.S. embassy official in Iraq, who declined to be named. "The election law should not be held hostage to the Kirkuk problem," he said. Deputy Speaker Khalid al-Attiya, a member of Iraq's largest Shi'ite bloc, said the election law would most likely be taken up after the summer break ends on Sept. 9. "It is possible a special session could be held before this time, but this is unlikely," he said. U.N. FRUSTRATION The United Nations said delaying the bill meant it would be hard to hold elections this year. "An important opportunity to pass an elections law was missed today," Andrew Gilmour, political director of the U.N. mission in Iraq, said in a statement. A version of the law that would have delayed a vote in Kirkuk, set up ethnic quotas for its governing council and dispersed Kurdish security forces there was passed by parliament last month, but Kurds boycotted the vote. President Jalal Talabani, himself a Kurd, then vetoed the bill as unconstitutional because of the absence of the Kurds, a big parliamentary faction. It was sent back to parliament for lawmakers to reach a compromise. The polls had been originally scheduled for Oct. 1 but the latest delay could push them well into 2009. Many Sunni Arabs and some Shi'ites boycotted the last vote in 2005 and their political alienation has fuelled instability since then. Kurdish politician Fouad Masoum said this week that Kurdish lawmakers supported the latest U.N. plan, which would have allowed local polls to take place except in Kirkuk, whose fate would be dealt with in a separate law later. "Our stance is to go ahead with the bill and not postpone it. With great regret, what happened has happened, and it was not our fault," he said. The issue has also triggered protests, including one last week in which a suicide bomber killed more than 20 people. For FACTBOX on the elections law, click on [nL6691459] For FACTBOX on legislative agenda, click on [nL6251599] (Additional reporting by Mohammed Abbas; Writing by Missy Ryan; Editing by Angus MacSwan)
U.S. soldiers from the Second Stryker Cavalry Regiment play video games at Diyala media center in Diyala province August 6, 2008. U.S. and Iraqi forces have routed al Qaeda in Baghdad ...
