US threatens to cut aid to Iraq if new government is sectarian

The US and Britain are pressuring Iraq's dominant Shia community to relinquish two key ministries in negotiations for a new government, as the country was hit by a wave of bombings that killed at least 24 people.

The US ambassador to Iraq, Zalmay Khalilzad, warned yesterday that Washington might cut aid to the Iraqis if the new government included sectarian politicians, pointing out that the US had spent "billions" in building up the police and the army.

"American taxpayers expect their money to be spent properly. We are not going to invest the resources of the American people into forces run by people who are sectarian," he said. He singled out the defence and interior ministries, saying they should be in the hands of people "who are non-sectarian, broadly acceptable and who are not tied to militias".

Jack Straw, the Foreign Secretary, flew into Baghdad last night and was expected to deliver a similar message. A Foreign Office spokesman said that while it was up to Iraqis to decide on their government members, "we are keen to see these two departments in the hands of competent people, probably technocrats".

Last week the Shia-dominated interior ministry announced an investigation into reports that it had been running death squads to wreak vengeance on Sunnis in reprisal for sectarian killings. There are fears that the killings by Shia commandos wearing police uniforms may encourage more Sunnis to join the armed insurgency.

Yesterday, in Baghdad, a suicide bomber killed 12 people and injured 15 by setting off an explosive belt on a bus in a Shia district of the city, while a bomb attack killed four people near Liberation Square. In the Kurdish city of Mosul, a suicide attacker blew himself up in a restaurant packed with policemen eating breakfast, killing at least five people and wounding 21, including 10 policemen, officials said. Two more civilians died when a car bomb exploded in Madain, south-east of Baghdad. Eleven people were injured.

Shia leaders say they have the right to control key offices in the government after winning 130 of the 275 seats in parliament in the elections in December. But the US and Britain say the secular, Kurdish and Sunni communities should have a "significant voice" in a future government, which will be in power for the next four years, and are pushing for a national unity government. It is anticipated that the discussions, which began in earnest this week, will take weeks, if not months, to produce a government.

The influential young Shia cleric Muqtada al-Sadr, for example, opposes the inclusion of the former prime minister Iyad Allawi, who, while in office, ordered the suppression of an uprising by fighters loyal to the Shia firebrand in the holy city of Najaf. But Mr Allawi, who presented a secular list in the elections, has been supported by the British.

The Shia's choice for Prime Minister, the incumbent Ibrahim al-Jaafari, has come in for criticism because of his ineffectiveness in the outgoing government. He acknowledged yesterday that there had been "objections" to his candidacy, but challenged those opposed to him to state their reasons. He added that the formation of a new government faced "obstacles," but not insurmountable ones.

Mr Straw is in Baghdad to help the process along, and will have talks with leaders who are struggling to set aside their sectarian bias to form a government.

Britain's relations with Iraq have been complicated by the latest video apparently showing British troops abusing Iraqis during a riot in southern Iraq, which has prompted two councils in southern Iraq to end co-operation with British forces. Mr Straw is expected to discuss the fallout with officials and British military commanders, although British diplomats pointed out that the Iraqi police in the south were still co-operating with the British.

The prospects for a withdrawal of British troops is also expected to be discussed by Mr Straw.

Failure to establish a unity government that includes a strong role for Sunnis would fail to undermine the Sunni-dominated insurgency and could delay plans for a phased withdrawal of the 138,000 American troops and the 8,000 British soldiers in Iraq.