Talabani accused lawmakers of using unconstitutional means to push the legislation through "against the will of the second-largest parliamentary bloc," warning it could jeopardize national unity and provoke sectarian tensions.

The Kurds hold 58 seats in the 275-member parliament and traditionally ally themselves with majority Shiites.

Iraqi laws must be ratified by the presidential council. But Talabani and Vice President Adel Abdul-Mahdi, a Shiite, rejected the election plan while Sunni Vice President Tariq al-Hashemi was abroad, deputy parliamentary speaker Khalid al-Attiyah told The Associated Press.

Talabani said in his earlier statement that he could not approve a law that was passed by only 127 members of the 275-strong parliament. The body had claimed it had a quorum and the measure was approved by a majority of the 140 lawmakers present.

The president also reprimanded lawmakers for using the secret ballot instead of "dealing with the disputed issue on the basis of consensus or agreements."

"The president is looking for a responsible stance by the political movements and the presidency of the parliamentary blocs, to correct that flaw," Talabani said.

'Quite contentious'
It was the latest setback for efforts by Prime Minister Nouri al-Maliki's government to overcome criticism that it has failed to take advantage of security gains to make political progress.

The State Department acknowledged the debate over the law was "quite contentious."

"Iraqis are facing a number of challenges in their country. This is clearly one of them, but it is also a sign of democracy at work," State Department spokesman Gonzalo Gallegos said. "We urge all parties to remain engaged and to work together and to find a path forward that will allow for provincial election in 2008."

Iraq's electoral commission has said the provincial balloting already needs to be delayed until Dec. 22 because it was too late to make the necessary preparations.

Before the council's decision was announced, an official in the commission said "the date will be changed to sometime in 2009" if the law was rejected. The official spoke on condition of anonymity because of security concerns.

Al-Attiyah, a Shiite, and other critics also have predicted the rejection would make a vote unlikely before next year.

Stalemate over Kirkuk
Kurdish legislators, along with the two deputy parliament speakers, walked out Tuesday after the Sunni speaker Mahmoud al-Mashhadani called for a secret ballot to break the deadlock over an article that included a requirement for ethnic power-sharing in Kirkuk.

Kurdish opposition to the equal distribution of provincial council seats among Kurds, Turkomen and Arabs in the oil-rich Kirkuk region — outside Kurdish territory but considered by many Kurds to be part of their historical land — has been a major factor in stalling the law's approval.

The draft law also would transfer security responsibilities in Kirkuk to military units brought from central and southern Iraq instead of those already there, an apparent move against Kurdish forces heavily deployed in the area.

"We declare that the Kurdistan region is not bound by the results of this unconstitutional process," the Kurdish Regional Government, which oversees the three provinces in its semiautonomous territory, said in a statement.

The elections are expected to redistribute power in Iraq's 18 provinces in what is considered a necessary step toward reconciliation. Many Sunni Arabs boycotted provincial balloting in January 2005, enabling Shiite Muslims and Kurds to win a disproportionate share of power.

A preliminary election law setting the October deadline for the vote had been touted as a sign that al-Maliki's government was making political progress, in addition to security gains. But the Iraqis then deadlocked over a follow-up law establishing guidelines and funding for the vote.

Agreement was reached after Shiite, Sunni, Kurdish and Turkomen lawmakers adopted a U.N. compromise to form a parliamentary committee to review disputes regarding Kirkuk separately so the elections could go ahead elsewhere.

Separate law on Kirkuk
The new law would require the committee to present a report with recommendations for a separate legislation on Kirkuk by March 2009.

U.N. envoy Staffan di Mistura, who has shuttled between the political blocs to pressure them to approve the law, said preparations for the vote would begin immediately.

"Today is an important day for Iraq and democracy as the parliament found a compromise over the election law," he told The Associates Press. "This will help Iraq and Iraqis to express their opinions by voting for their candidates in the provinces."

The measure still needs to be approved by the three-member presidential panel led by President Jalal Talabani, himself a Kurd who vetoed the last attempt by parliament to push through a measure over Kurdish opposition.

But Kurdish legislators agreed to the latest proposal, suggesting presidential approval was more likely.

Power-sharing agreements
U.S. and Iraqi officials believe the elections are an essential step toward building a long-term peace among the country's rival religious and ethnic communities. Voters will choose provincial councils, which will wield considerable power at the local level.

Many Sunni Arabs and some Shiites boycotted the last provincial election, held in January 2005, enabling Shiite religious parties and the Kurds to win a disproportionate share of power.

U.S. officials have complained privately that Iraqi politicians have failed to take advantage of the sharp drop in violence — down 80 percent since last year, according to the American military — to forge lasting power-sharing agreements.

The provincial vote had been due to be held as early as Oct. 1.

"The result indicates that there is a religious and nationalist fanaticism," said Christian lawmaker Younadem Kana. "This law as it stands is an insult to the communities rather than being fair to them."

The bill, which was approved by 106 of the 150 lawmakers who attended the session, now goes to the presidential council for approval. Kana demanded that the council, which includes the president and two vice presidents, veto the measure.

"We reject the seat, and want to go back to being first class citizens," Kana said.

In September, parliament approved a new law mandating elections for ruling provincial councils in most of Iraq's 18 provinces — the first such ballot since January 2005. But the law removed a system that reserved a few seats for Christians and other religious minorities.

Lawmakers cited a lack of census data to determine what the quotas should be. Thousands of Christians have fled the country since the 2003 fall of Saddam Hussein's regime and the rise of Islamic extremist groups.

But many Christians saw the parliament's move as an effort to marginalize their community and demanded supplemental legislation restoring their seats.

The election commission had urged parliament to approve the supplemental bill this week so that the provincial balloting could be held as planned by Jan. 31.

Staffan de Mistura also told a news conference that much stronger measures would be put in place to stamp out fraud. "Fraud will not be allowed to take place," he said.

Tough battles will be fought between rival Shi'ite factions in the oil-rich south and between Kurds and Arabs in the north. Officials expect a surge in bombings and assassinations as tensions rise and different groups jostle for position.

"We are expecting spectacular attempts to try to disrupt the stability of Iraq and of the elections," De Mistura said.

"But security has improved. The attempts are not going to succeed in disrupting the (direction) in which Iraq is going."

The vote is seen as a key test of Iraq's fledgling democracy and a step toward reconciling quarrelling factions, but it is also feared the high stakes could beget violence. Sunni Islamist al Qaeda bombers are likely to target the polls.

"All the political entities and parties (must) make sure that the forthcoming ... days will be as civilized and non-violent as possible," De Mistura said.

The elections are expected to boost the participation of Iraq's Sunni Arabs, who were dominant under Saddam Hussein and now complain they are under-represented.

Many Sunni Arabs stayed away from the last polls in January 2005, which were also marred by bitter accusations of electoral fraud by parliament's main Sunni Arab bloc and other parties.

De Mistura said that planned safeguards against fraud in January's election included each polling station having a voter list printed and on display to avoid danger of double voting.

Also a move will be made to bar polling agents from showing party affiliation, he added.

He said that the U.N. mission and another agency had already trained some 60,000 electoral observers and they hoped to have more than three times that number trained for the day.

"We are confident and determined to see that these elections take place on the 31st of January," he said.