The Iraqi parliament is expected to swear in a new Prime Minister and government tomorrow after months of wrangling between rival factions.

If all proceeds according to plan the ceremony will finally complete the transition to democracy in Iraq, five months after a new parliament was elected in December.

Nouri al-Maliki, the Prime Minister-designate, plans to present his new Cabinet to MPs, who will then formally inaugurate the new ministers.

In one of the few names to be leaked, nuclear scientist Hussain al-Shahristani, a hardline Shia, looked set to become Iraq’s next oil minister, negotiators said today. He has told aides that his main focus, if he gets the job, would be to fight the rampant corruption which has crippled Iraq's oil industry. Sabotage and smuggling have also severely hit state oil revenues.

Mr al-Maliki's two most important decisions regard his selection of Defence and Interior Ministers. Sunni Arabs want the Defence Ministry, which runs the army, while the Shias want the Interior Ministry, which controls the police.

It has been suggested that Mr al-Maliki might appoint himself to head the two ministries until all parties can agree, but that could immediately lead to discord.

Such rows are likely to hamper the main goal of the new Government, which is to restore security. Sectarian violence and attacks by insurgents and militias have killed many people and led thousands of Iraqi families to flee their homes.

Most Iraqis are said to care little whether ministers pray at the same mosque they do. What they care about is whether the electricity works and the drinking water is clean, and whether hooded gunmen snatch their relatives in the dark of night or if their children can get home from school safely.

The new government will be judged by its performance in improving quality of life and bringing peace to the streets, say observers. But with Iraq’s institutions weak and inefficient, that will be an enormous challenge, and hard-liners among both Sunni and Shia communities will be doing their best to derail such efforts.

America and Britain are pinning their hopes for an early withdrawal of their troops on Mr al-Maliki's success. Last night Zalmay Khalilzad, the US Ambassador to Iraq, praised the outgoing prime minister, Ibrahim al-Jaafari, and said the inauguration will be a "historic step in Iraq’s transition from dictatorship to democracy".

Tony Blair’s official spokesman said today: "The formation of a national unity government in Iraq is a very important moment. It will mean the wishes of 12 million voters in Iraq will have been put into place.

"If it happens, it will be a significant achievement. That would be a defining moment."

Violence continued unabated today, as roadside bombs and other attacks killed 10 Iraqis and wounded 26 people, including a US soldier riding through Baghdad on a bomb disposal vehicle.

In the worst violence, a gunbattle between suspected insurgents and Iraqi police killed five civilians and wounded eight in Jihad, a neighbourhood of western Baghdad. Police Lieutenant Maitham Abdul-Razzaq said that US forces helped police to seal off the area after the fighting.

A hidden roadside bomb hit a US convoy in Dora, a mixed Sunni-Shia-Christian area in south Baghdad which has seen severe violence.

The blast heavily damaged the armoured vehicle used by bomb disposal teams to search for mines, which are often buried in the dirt beside roads or in piles of litter. One US soldier was wounded and evacuated from the scene.

Two other roadside bombs targeted Iraqi forces in the capital. One exploded outside the home of a police officer in east Baghdad at 6am in an apparent assassination attempt, severely wounding the officer's wife and two children. Insurgents often conduct such attacks in an effort to discourage Iraqis from joining police forces or the Iraq army.

A man who identified himself as a relative of the officer said: "We were sleeping in the house. We heard a big bang. My brother’s family was severely burned and hospitalized."

Another roadside bomb exploded at 8am near an Iraqi army patrol in western Baghdad, wounding three soldiers, said Abdul-Razzaq. Police also found the bullet-ridden bodies of four Iraqis who had been kidnapped and tortured by some of the many death squads that are active in the capital. One of the victims was a primary school teacher.

Yesterday four US soldiers and their Iraqi interpreter were killed by a roadside bomb and at least two dozen Iraqis died in violence across the country.

The kidnappers of a United Arab Emirates diplomat in Iraq also demanded the closing of the country’s embassy in Baghdad in a videotape aired on Arab television. Al-Jazeera TV did not air audio with the video, which showed a man said to be the hostage, Naji Rashid al-Nuaimi, 28, who was abducted by gunmen on Tuesday.

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