IRAQ is facing a political crisis over the failure of the prime minister, Ibrahim Jaafari, to form a cabinet, raising the possibility that he may be forced to resign little more than a fortnight after his appointment.

Jaafari, who leads the Daawa party, one of the largest groups in the United Iraqi Alliance (UIA) that won the January 30 election, has been unable to secure agreement with his rivals over the distribution of cabinet posts.

The deadlock has prompted speculation that he may be replaced by Ahmad Chalabi, a former Pentagon favourite and prominent figure in the UIA; or by Iyad Allawi, the former prime minister, who was heavily defeated in the election but who appears to be Washington’s preferred candidate.

Jaafari was appointed prime minister on April 7. Under the interim constitution, he must form a government within a month or resign.

Sources close to the negotiations said he nearly announced the line-up on Thursday, but Kurdish leaders and Allawi made new demands that would have increased their respective powers and the talks collapsed.

“The issue now is Jaafari himself, with the Kurdish bloc and Allawi determined not to have him as prime minister,” said a source. “They know their demands will not be met — they are making them to derail Jaafari’s attempts to name the government.”

The Americans are equally reluctant to embrace Jaafari. At a meeting last week with Iraqi politicians, the US ambassador, Zalmay Khalilzad, is said to have made clear Washington’s reservations, not least because he is seen as too sympathetic to Iran. “They do not want Jaafari as prime minister at any cost,” one source said.

The choice of Allawi, whose party won just 40 of the 275 seats in Iraq’s assembly, would be controversial. Religious leaders think he is too secular; opponents of the ousted Saddam Hussein point out that he is a former Ba’athist; and many Iraqis regard him as too close to the Americans.

Chalabi, too, has a chequered history. Once touted as the Pentagon’s choice, his relationship with the occupying forces quickly deteriorated.

It appeared that he was being sidelined in part because he had helped to supply intelligence about weapons of mass destruction that have never been found. There were also whispers from Washington that he had passed secret information to the Iranians, an allegation he vigorously denied.

In May last year American troops and Iraqi police raided his home and the headquarters of his party, the Iraqi National Congress, in Baghdad. His fall appeared complete when a warrant for his arrest in relation to alleged counterfeiting was issued. He denied the charges and the case has now lapsed.

• A bomb attack on an Iraqi National Guard convoy near Abu Ghraib west of Baghdad killed nine soldiers and wounded 20 yesterday, police said.

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