BAGHDAD Iraqi lawmakers failed Wednesday to agree on a provincial election law and adjourned for the month, casting doubt whether U.S.-backed balloting can be held this year in the country's 18 provinces.
Parliament did manage to sign off on a $21 billion supplemental budget, a move the Iraqis hope will ease U.S. congressional criticism that they aren't paying their fair share of Iraq's reconstruction at a time of economic hardship in the United States.
But the inability to approve the election bill dealt a setback to U.S. hopes for reconciliation among Iraq's rival communities despite the decline in violence.
President Bush had telephoned Iraqi leaders several times over the past week urging them to reach agreement so elections could proceed by the end of the year.
The bill failed because Kurds, Arabs and Turkomen were unable to come to terms on a power-sharing deal for the multiethnic region around the city of Kirkuk, the center of Iraq's northern oil fields.
Kurds consider Kirkuk their ancestral capital and want to incorporate it into their self-ruled region in the north. Most Arabs and Turkomen want Kirkuk to remain under central government control.
Following a Kurdish walkout, parliament approved an elections bill last month that would have established an ethnic quota system on the 41-member Kirkuk area provincial council and reduced the role of Kurdish security forces there.
President Jalal Talabani, a Kurd, vetoed the measure as unconstitutional and sent it back to parliament, which convened a special session starting last Sunday.
Since then, Iraqi lawmakers had been locked in intensive negotiations. When compromise appeared impossible, parliament speaker Mahmoud al-Mashhadani announced Wednesday that lawmakers would break for summer recess and then resume sessions on Sept. 9.
A committee will continue negotiations over the bill during the recess, he added.
Deputy parliamentary speaker Khalid al-Attiyah insisted the provincial elections could be held this year so long as the legislation is passed in September. But U.N. spokesman Said Arikat warned the delay would make "difficult for us to hold the elections this year."
During the negotiations, the U.N. had proposed a compromise in which the Kirkuk vote would be postponed to allow elections to be held in Iraq's 17 other provinces.
But the proposal also included a reference to a constitutionally mandated referendum on the status of Kirkuk which the Kurds have long demanded.
That drew opposition from Turkomen and Sunni Arabs.
"Thank God, we are relieved," said Aydin Aksu of the Iraqi Turkomen Front when parliament adjourned. Aksu called the U.N. proposal "a plot aimed at strengthening the Kurds further in Kirkuk."
Sunni Arab lawmaker Abdul-Karim al-Sammaraie said the status of Kirkuk was "very sensitive" because so many ethnic and religious groups live there and that it needed a "special law."
Jalaluddin al-Saghir, a Shiite cleric and prominent lawmaker, accused some parties of using the dispute to delay the elections for political gain.
"Some of these factions do not enjoy any popularity and they wanted to gain voters' sympathy by raising the issue of Kirkuk," he said.
Fouad Massoum, a senior Kurdish lawmaker, held out hope that the vote could still be held this year.
"We were not the reason behind delaying the election law. We support the idea of holding elections this year," he said, accusing al-Mashhadani of ending the session without consulting them.
Kurds and their allies control the current provincial council in the Kirkuk area. Many Sunni Arabs boycotted the last provincial election in January 2005, leaving them feeling shut out of the political process.
Boycotts and security problems plagued the 2005 balloting elsewhere in the country. U.S. officials have been pressing for new elections to guarantee better representations for all the country's ethnic and religious groups, giving them a greater stake in the political process.
With violence down to its lowest level since 2004, U.S. officials believe the time is right for Iraqi leaders to make long-term power-sharing arrangements in Kirkuk and elsewhere in the country to cement the security gains. As a sign of better security, the U.S. said Iraqi troops this week seized scores of Iranian-made rockets and mortars in Baghdad's Sadr City district, from where Shiite militants hammered the Green Zone last spring.
In the northern city of Mosul, however, a car bomb killed three people Wednesday and wounded 14, the U.S. military said in a sign that violence though diminished is far from over.
The standoff over Kirkuk illustrates the challenges facing the different communities in setting aside their own interests for the national welfare.
At the same time, the U.S. is urging the Iraqis to shoulder a greater share of the expense for rebuilding the country a move that will be encouraged by enactment of the $21 billion supplementary budget.
Finance Minister Bayan Jabr said passage of the supplement would raise the overall budget to some $70 billion at a time when the government is flush with oil revenues. But critics have said Iraq has been slow to spend money allocated under previous budgets.
A U.S. General Accounting Office report released Tuesday said Iraq could end the year with as much as a $79 billion budget surplus as oil revenues pile on top of leftover income.
U.S. officials who work with the Iraqis on reconstruction said the Baghdad government has been increasing its capital spending by 30 percent to 35 percent each year since 2006 although they added that both governments want to see the pace increased.
The officials, speaking on condition of anonymity because the issue is sensitive, said the influx of oil money had been difficult to manage, not only for Iraq but for other oil-producing countries.
They also cited a cumbersome approval process put in place to curb corruption lack of expertise in the ministries and a shortage of Iraqi contractors capable of taking on major development projects.
Since 2005, the United States has funded a number of efforts to teach civilian and security ministries how to execute their budgets effectively.
The efforts included programs to advise and help Iraqi government employees develop the skills to plan programs and to deliver government services such as electricity, water and security.