Members of the newly-elected Iraqi National Assembly made a proud step forward as they took the oath on Wednesday, but failed to reach an agreement on the formation of a government.

Following a start by reading of the Holy Koran, high-profile figures hailed the largely ceremonial session as a victory for Iraqis, who have been battling for freedom and democracy for years. "By name of God, I swear to protect the sovereignty of Iraq, protect its natural resources and the federal system," swore Medhatal-Mahmoud, head of the judicial council.

Ashraf Qazi, UN Secretary General Kofi Annan's special envoy to Iraq, conveyed Annan's congratulation.

"There is a great chance for Iraqi people to move on the way of democracy," said Qazi.

As expected, the meeting did not follow a pre-scheduled agenda to elect a speaker and two deputies and a presidential council comprising the president of the state and his two deputies.

Observers said the failure showed that major blocs were still locked in bickering over the top posts of the transitional governmental, without which the parliament can not start writing a constitution.

"It's hopeless, they haven't finished their haggle ... They do not listen well to each other, I suppose," a Shiite official told reporters after the inauguration.

According to draft agreements between the Kurdish parties ,winning 77 seats in the assembly, and the Shiite alliance, garnering 140 seats, Kurdish heavyweight Jalal Talabani takes the presidency whereas Shiite religious leader Ibrahim al-Jaafaribe comes the prime minister, leaving the speaker ship open for a Sunni Arab.

But talks have stalled over the Kurdish demand of incorporation of the oil-rich city of Kirkuk into their autonomous region and the fate Peshmerga, or militia, as well as a written guarantee that the regime in Iraq will remain secular.

Iraq's interim Foreign Minister Hoshyar al-Zibari, a Kurd, said the Kurds had achieved progress in talks with the Shiite bloc. "We are that close (in forming a new government)," Zibari said on the sidelines of the meeting.

Jaafari, center of the political haggling, showed an understanding gesture.

"Their (Kurdish) concerns (of repeated breakdown of any agreement with the central government) as in the recent history lead to their dear demands," he said.

Jaafari assured reporters that "within two weeks you will seethe birth of a new government."

Ali al-Dabbagh, another member from the Shiite alliance, told Xinhua that "the agreement with the Kurds needs some amendments" and a deal is expected "within a few days."

Any new government will face a tougher challenge -- to bring the largely marginalized Sunni Arab community into the political process.

"Most important of all is the inclusion of all parties in the political process and the forming of a transitional government," said Iyad Allawi, the outgoing prime minister.

The comment was echoed by Ghazi al-Yawar, the incumbent president, who saw the priority of the assembly was to draft a permanent constitution.

In what appeared to be part of the efforts to avoid being further sidelined, Yawar teamed up with three other Sunni leaders and threatened to withdraw from the parliament if Sheikh Fawaz al-Jarba, a Sunni allied with the Shiite alliance, becomes the speaker.

Meshaan al-Juboury, member of the quartet and a Sunni contender for the post of one of the two vice presidents, admitted to reporters after the session that Yawar was the most hopeful for the post as the parliament speaker.

Sunni parties have won a mere share of seven seats in the parliament, as most Sunni Arabs stayed away from the Jan. 30 poll due to a boycott call.

Sunni resentment against any US-backed authorities has fueled the insurgency, which the American forces and the fledging Iraqi security forces have failed to curb.

Several blasts echoed near the convening site minutes before Wednesday's milestone meeting, and the mortar attack was later claimed by the group led by al-Qaida ally Abu Mussab al-Zarqawi, a shadowy terror mastermind behind numerous deadly bombings and killings in Iraq.

(Xinhua News Agency March 17, 2005)