UPDATE 1-Iraqi lawmakers pass election law

* Vote delay had put Jan. 16 poll date in doubt

* Law largely avoids fateful decision on Kirkuk

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BAGHDAD, Nov 8 (Reuters) - Iraq's parliament on Sunday passed a long-delayed election law paving the way for a national vote in January after overcoming a potentially explosive row over the disputed city of Kirkuk, lawmakers said.

The parliamentary election next year is a crucial test for the world's 11th largest crude oil producer as it emerges from sectarian carnage unleashed by the U.S. invasion in 2003 and starts to stand on its own feet while U.S. troops pull out.

A delay in passing the law because of disagreements on how to conduct the ballot in Kirkuk had thrown the Jan. 16 election date into doubt, and U.S. officials said the row could have had an impact on plans to draw down U.S. troops next year.

Ethnic Kurds claim Kirkuk, which sits on vast oil resources, as their ancestral home and want it wrapped into their semi-autonomous northern enclave.

In the end, a compromise that largely avoided forcing the country to make a decision now about the fate of Kirkuk was approved by 141 out of 196 lawmakers present. The rowdy and emotional session was broadcast live on state television.

Kirkuk is one of several flashpoints that could lead to violence between Baghdad's Arab-led government and Kurds who have enjoyed a large degree of independence since the 1991 Gulf war. The city's Arabs and Turkmen fiercely oppose Kurdish aims.

A number of compromises submitted by the United Nations and a council headed by Shi'ite Arab Prime Minister Nuri al-Maliki and President Jalal Talabani, a Kurd, were rejected in the run-up to Sunday's vote.