Iraqis see compromise on Kirkuk standoff

By Waleed Ibrahim

BAGHDAD (Reuters) - Iraqi political leaders reached a tentative compromise on Monday that may resolve a stalemate over the fate of the oil-rich city of Kirkuk and allow local elections to go ahead, the deputy speaker of parliament said.

Lawmakers rescheduled for Tuesday a vote on a provincial election law, which had been held up by wrangling over Kirkuk that has threatened to escalate into renewed ethnic strife.

Khalid al-Attiya, deputy parliament speaker and a member of Iraq's largest Shi'ite bloc, said the parliamentary debate was scheduled "after fresh hope appeared of reaching an agreement".

Washington has been pressing hard on Iraqi leaders to resolve the stand-off before it jeopardises the elections, originally scheduled for Oct. 1 and seen as vital to reconciling the country's factions and solidifying its fragile democracy.

President George W. Bush has personally phoned senior Iraqi leaders to push them to compromise.

A vote had been planned for Sunday but it was scrapped when lawmakers failed to agree on how the elections would affect Kirkuk, which minority Kurds want to make part of their semi-autonomous northern region.

Although violence has fallen to its lowest level since 2004, Iraq remains a dangerous place. Two U.S. soldiers were killed and one was wounded on Monday when a bomb struck their vehicle in eastern Baghdad, the U.S. military said.

Iraqi forces captured an al Qaeda leader, known for his ferocity by the nickname al-Saffah (the butcher), in the restive Diyala province north of Baghdad, Interior Ministry spokesman Major-General Abdul-Karim Khalaf said. Thousands of Iraqi soldiers and police launched an offensive in the area last week.