BAGHDAD (Reuters) - Iraq's Sunni-backed Iraqiya bloc told parliament on Saturday it would remain in a Shi'ite-led government, despite a walkout and angry comments from its leader that threatened to damage the long-sought accord.
Iraqiya's leader, former prime minister Iyad Allawi, skipped the parliamentary session and headed to London for family engagements after telling CNN in an interview that power-sharing between Iraq's Shi'ite, Kurdish and Sunni factions was "dead."
Allawi and most of Iraqiya's lawmakers walked out of parliament on Thursday in a protest that showed the fragility of a deal reached this week between the fractious political blocs to give Shi'ite Prime Minister Nuri al-Maliki a second term.
That agreement ended an eight-month impasse after an inconclusive March 7 election in which Allawi's cross-sectarian alliance, supported heavily by minority Sunnis, won two more seats than Maliki's mainly Shi'ite bloc but no majority.
"There was a misunderstanding that happened between the political blocs," Iraqiya spokesman Haidar al-Mulla told a session of parliament on Saturday. "All blocs are going ahead in executing all the agreements. We confirm that Iraqiya will be part of a national partnership government."
The announcement eased concerns that the deal -- reached after months of rancorous bargaining which had heightened fears of renewed sectarian violence -- might fall apart, but left Allawi's position unclear.
"We think the concept of power-sharing is dead now," Allawi told CNN in an interview. "It's finished."
Asked how the end of a power-sharing deal might affect a future government, he said: "For Iraq, there will be tensions and violence, probably."
Allawi headed to London to be with his family, Iraqiya officials said. Some Iraqiya lawmakers said they were surprised he had departed and that he had not told them he was going.
Other Iraqiya lawmakers said Allawi's harsh rhetoric was meant to pressure Maliki into keeping his promises.
Maliki has enough support from Shi'ite and Kurdish parties, and from a few dozen Sunni lawmakers, to rule without Iraqiya.
But Washington and Arab countries are keen to ensure the Sunni-supported bloc is represented, otherwise Sunni anger might reinvigorate a weakened but still lethal insurgency.
Iraq needs a stable government to rebuild infrastructure and exploit its vast oil wealth as violence ebbs, seven years after the U.S.-led invasion that ousted dictator Saddam Hussein.
Under the deal reached three days ago, politicians divided up the three top posts along ethnosectarian lines.
Lawmakers elected Osama al-Nujaifi, a Sunni Arab leader of Iraqiya, as speaker, and reappointed Jalal Talabani, a Kurd, as president. Maliki, a Shi'ite, was nominated as prime minister, and has 30 days to form a cabinet. Allawi was made head of a yet-to-be-created policy council.
But Thursday's show of unity, which had arch-rivals Maliki and Allawi smiling side by side in parliament, quickly unravelled when two-thirds of Iraqiya's lawmakers walked out.
Allawi told CNN he was thinking of forming a parliamentary opposition rather than taking part in the government.
"I will not be a part of this theatre," he said. "This is a new dictatorship that is happening in Iraq."
Asked if he was concerned about inflammatory rhetoric stirring violence as the government was formed, General Lloyd Austin, commander of the nearly 50,000 American troops still in Iraq, said everyone was entitled to free speech.
"There is always that possibility, and are we concerned about it? We remain concerned about it, not only during this time but at any point in time throughout the year," Austin said. "Certainly things are a little bit more sensitive during this time period."
Kadhim al-Shimari, an Iraqiya lawmaker who had previously vowed to back Maliki with or without Allawi's consent, said he believed Allawi had said he would join the government only after coming under pressure from other Iraqiya leaders.
"He thinks he can't have a real role in the National Council for Strategic Policies in a way that goes with what the Iraqi people want," he said.
Additional reporting by Khalid al-Ansary and Suadad al-Salhy; writing by Jim Loney; editing by Michael Christie, Tim Pearce