The US plan to withdraw from Iraq is back on track after the Parliament in Baghdad last night approved a law to hold elections in January.

Months of wrangling between Iraqi MPs had threatened to delay the election, which could have then pushed back President Obama’s schedule for pulling out combat troops by August 31 next year.

The election law, passed with a comfortable majority, transforms the way Iraqis elect their leaders but fails to offer a clear solution for resolving ethnic tensions in the oil-rich northern region of Kirkuk.

Voters will now be able to pick specific candidates in elections, rather than have to choose between amorphous electoral alliances of a dozen of more parties. The result is likely to be a significant turnover of MPs at the election as Iraqis will effectively be able to deselect unpopular leaders — even when their parties do well.

Many MPs had tried to hold on to the old system, fearing that they would lose their seats but strong public and clerical support for the “open list” system eventually swayed enough to bring change. The other contentious issue was who would be allowed to vote in the city of Kirkuk, which straddles Kurdish and Arab areas. In recent years tens of thousands of Kurds have moved to Kirkuk, changing the ethnic balance. Many claim that they were expelled by Saddam Hussein, and are simply returning home.

MPs last night agreed a complicated compromise for the vote in the city, which appears to delay a resolution of the problem for a year.

Parliamentary elections were originally planned for January 16 but after MPs missed several election law deadlines, they will now be held a week later.

Passage of the law brought relief to American commanders, diplomats and President Obama. He said: “This agreement advances the political progress that can bring lasting peace and unity to Iraq, and allow for the orderly and responsible transition of American combat troops out of Iraq by next September.

“This is an important milestone as the Iraqi people continue to take responsibility for their future.”

Iraqis are shouldering more of the political burden compared to the last election in 2005, which was largely held under American auspices. But even now Iraqi politicians cannot quite do without the Americans. They only reached an agreement after arm-twisting by the American Ambassador. “We have been very much engaged since the summer ... But this is a ‘made in Iraq’ election law,” said Ambassador Christopher Hill.

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