Iraqi panel allows banned candidates in poll

BAGHDAD (Reuters) - An Iraqi appeals panel has decided to allow nearly 500 candidates banned for alleged ties to Saddam Hussein's outlawed Baath party to stand in a March parliamentary election, electoral authorities said on Wednesday.

The ban was imposed by a controversial committee last month and was seen by once-dominant Sunnis as an attempt by Shi'ite-led authorities to marginalise them, threatening to reopen old sectarian wounds in the run-up to the vote.

The election comes at a critical juncture for Iraq, which is trying to put years of war that followed the 2003 U.S. invasion behind it and revamp its economy by signing a raft of oil deals set to turn it into a top three oil producer.

"The appeals panel decided to allow the banned candidates to participate in the next election and decided to postpone looking into the case until after the election," Hamdiya al-Husseini, a member of the Independent High Electoral Commission, said.

The candidates would not be able to assume office if they win until the panel has given a final ruling on their cases, she said.

The Justice and Accountability Commission, an independent body that aims in part to ensure the Baath party does not return to public life, said in January that a number of parties should be prevented from standing in the March 7 election.

Its original list of 511 candidates, since whittled down somewhat, included prominent Sunni politician Saleh al-Mutlaq, who openly courted the votes of people feeling nostalgic for the stability and greater public safety of the Saddam Hussein years.

Under the Sunni dictator, the Baath party killed thousands of Shi'ites and Kurds in crackdowns. Iraq's "de-Baathification" rules were originally drawn up by U.S. administrators after Saddam was driven from power in 2003.

The banned candidates had the right to contest the decision to the appeals board, which was hastily set up and consisted of seven unidentified judges.

Tens of thousands of Iraqis died in the sectarian warfare between Shi'ites and Sunnis that hit its peak in 2006-07, but overall violence has subsided over the last two years.

(Reporting by Ahmed Rasheed; Writing by Jack Kimball; editing by Noah Barkin)