Iraq's political leaders, under pressure from Washington, were set to meet in parliament on Thursday in hopes of breaking a deadlock over the formation of a unity government seen as the best hope to avert civil war.

Iraqi Prime Minister Ibrahim Jaafari presides over a cabinet meeting in Baghdad, 19 April. Iraq's parliament was to meet for only the second time since it was elected in December amid protracted political deadlock that has stalled the formation of a government for more than four months. [AFP/File]

But legislators from the Shiite Alliance, the largest bloc in parliament, threatened to boycott the sitting, which would throw the U.S.-backed political process into further disarray.

The United States hopes a government comprising Shiites, Sunni Arabs and Kurds will foster stability and set the stage for an eventual drawdown of U.S. troops. It has grown increasingly anxious as Iraqi politicians struggle to form an administration four months after elections in December.

The cause of the political paralysis is Shiite Prime Minister Ibrahim al-Jaafari's refusal to heed calls from Sunni Arabs, Kurds and even some Shiites to withdraw his nomination for a second term.

Raising the possibility that Thursday's scheduled parliament session could be delayed for a second time in a week, a member of the powerful Shiite Alliance said the bloc would boycott the sitting if all parties did not agree beforehand on key posts, including the assembly speaker and a presidential council.

"We agreed that we will hold a meeting in parliament only if all parties agree on all key posts," Ali al-Adeeb, a member of Jaafari's Dawa party, told Reuters.

He said the Alliance would announce later on Thursday if it would attend the session, scheduled for 4 p.m. (1200 GMT).

The assembly, which has sat only once since it was elected in December, was postponed on Sunday to give parties more time to bury their differences.

Signaling growing frustration at the delay, President Bush said on Wednesday the "the political process in Iraq must occur soon and we are working toward that end."

Although legislators are unlikely to resolve the row over the premiership if they meet at all on Thursday, they could vote on the nomination of other key government posts, including the speaker of parliament.

The Alliance bloc, drawn from the country's majority Muslim Shiite community, earned the constitutional right to choose a prime minister after winning 130 seats in the 275-seat assembly.

Removing a smaller hurdle in the impasse, Sunni leader Tareq al-Hashemi withdrew his candidacy for speaker after objections by Shiite legislators, who expressed concern over his past links to Saddam Hussein's Baath party, Sunni sources said.

Instead, the Iraqi Accordance Front, the minority Sunnis' largest parliamentary group, decided on Wednesday to support Sunni leader Adnan al-Dulaimi for speaker, a post which is expected to go to a Sunni.

The secular group of former Prime Minister Iyad Allawi, who is popular in Washington, will propose him for one of the two vice presidents, a largely ceremonial post. Allawi's group, the Iraqi List, is the fourth biggest bloc, with 25 seats.

Jaafari was nominated during an internal Shiite vote in February, but his critics say he is a weak leader who has failed to curb violence and improve the economy in his year in office.

He told a televised news conference on Wednesday that resigning was "absolutely not" in his plans.

The political paralysis has coincided with a surge in violence that has pushed Iraq toward the brink of civil war three years after U.S. forces invaded.

The United States, which has more than 130,000 troops in Iraq, has blamed the political vacuum for fuelling violence.