AMERICAN hopes of easing tensions between different Muslim groups in Iraq have suffered a setback with the rejection of a US-backed initiative which was intended to ensure that the Sunni minority would be properly represented in a new 275- member national assembly.

The threat of a Sunni boycott of this month’s election has increased fears that it may result in a Shi’ite landslide that would leave the formerly powerful Sunnis with little influence — and increase support for anti-western insurgents.

American officials have discussed a number of possible post-election measures with Iraq’s interim government. But the head of the country’s largest Sunni party said last week that he would not accept an arrangement to reserve seats for Sunni candidates who were not elected.

The withdrawal from the election of the Iraqi Islamic party left Sunni voters with a sharply reduced choice of candidates. Mohsen Abdul Hamid, the party’s leader, said that deteriorating security in the “Sunni triangle” north and west of Baghdad made it impossible to hold a “credible” election.

Hamid also dismissed reports that Washington was seeking to guarantee a quota of high-level jobs for Sunnis, who make up 20% of Iraqis. “We don’t support appointment, which is undemocratic,” he said. He urged a six-month election delay and warned: “Any elected assembly without the participation of the Islamic party will be considered illegitimate.”

Other party leaders also shunned the power-sharing proposal. “One does not correct a wrong with another wrong,” said Tawfiq al-Yasseri, general secretary of the National Democratic Coalition, an independent secular party.

Coalition officials believe that senior aides to Grand Ayatollah Ali al-Sistani, Iraq’s leading Shi’ite cleric, are sympathetic to a post-election deal to defuse Sunni hostility.

The dilemma for Washington is that it cannot be seen to be manipulating the outcome of an election intended to prove that the coalition no longer rules Iraq. At the same time, British and US forces may bear the brunt of Sunni fury if a Shi’ite government begins to steer the country towards Iran-style theocracy. The leading Shi’ite candidate in the elections is Abdul Aziz Hakim, a cleric with strong connections to Tehran.

“First things first,” one US official said. “We have to make the elections happen and then we’ll worry about the results.”

Calls for a postponement were rejected last week by President George W Bush, who believes that a delay would encourage the insurgents. “It’s very important that these elections proceed,” Bush said.

The president also condemned the intervention of Osama Bin Laden, who urged a boycott of the vote and warned Iraqis who go to the polls that they would be treated as “infidels denouncing our great God”. The warning was echoed by a similar statement from three insurgent groups, reportedly prompting 700 employees of the election commission in Mosul to resign.

Iraqis who brave the polls on January 30 will not lack choice. The Iraqi Islamic party’s withdrawal left 7,411 candidates from 230 parties whose share of the seats will be decided by proportional representation.

Most are minor local groups who are likely to be ignored. Independent Sunni candidates left in the race represent only a small portion of potential Sunni voters.

American officials acknowledge that creating conditions for a fair Sunni vote has become a daunting task. Political candidates are routinely targeted as US collaborators and many civilians fear that they will be attacked by insurgents if they visit polling stations.

Security on election day will be provided by the newly trained Iraqi forces who have so far shown little stomach for a fight. Coalition forces will be kept in reserve to cope with any serious incidents.

In Shi’ite areas voting registration has gone comparatively smoothly, but Sunni voters have not been able to register in Anbar province, home to the former insurgent strongholds of Falluja and Ramadi.

“In effect you will have six large provinces of Sunni Iraq not represented in the assembly or cabinet,” al-Yasseri calculated. He acknowledged that interim government officials including Iyad Allawi, the prime minister, had considered postponing the election or staggering it over several weeks to maximise security resources.

“We are damned if we do (delay) and damned if we don’t,” he said. Any move to postpone would also inflame Shi’ite resistance. After years of persecution at the hands of Saddam Hussein and his Sunni minions, the Shi’ite majority is determined to reclaim what it sees as its rightful leadership role.

Sabah Kamel, a spokesman for the Iraqi interior ministry, said: “The election will not be perfect, nor will we get a perfect result. But we will have more than this country ever had under Saddam Hussein.”

Additional reporting: Ali Rifaat, Baghdad

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