Iraq passes election law, Obama hails milestone

By Ahmed Rasheed and Muhanad Mohammed

BAGHDAD (Reuters) - Iraqi lawmakers passed a long-delayed election law on Sunday to pave the way for a January poll, after parliament sidestepped a potentially explosive row over the oil-producing city of Kirkuk.

Prolonged wrangling over the law had thrown the election date into doubt, and U.S. officials had feared the row would hit plans to draw down U.S. troops next year.

"Tough challenges remain and I am sure there will be difficult days to come but this agreement advances the political progress that can bring lasting peace and unity to Iraq, and allow for an orderly and responsible transition of American combat troops out of Iraq by next September," U.S. President Barack Obama said.

The parliamentary election is seen as a crucial test for the world's 11th largest crude oil producer as it emerges from carnage unleashed by the U.S. invasion in 2003.

After weeks of deadlock, a compromise over the conduct of the poll in Kirkuk was approved by 141 out of 196 lawmakers, in a rowdy session broadcast live on state television.

Kurds consider Kirkuk their ancient capital, want to make it part of their northern region and sought to use up-to-date voter rolls to reflect an increase since 2003 in their numbers there.

Arabs and Turkmen say the city should remain under central government authority and believe Kurds have stacked Kirkuk to tip the demographic balance.

The law ended up using current voter registrations but made the election result subject to a review if there was an unusual increase in registered voters in the last five years. The consequences of a possible review were left ambiguous.