Inter-party talks to form a new government a full eight months after Iraq's parliamentary election moved to Baghdad on Tuesday in a race to clinch an elusive accord before a meeting of parliament.

Iraqi leaders in the Kurdish capital of Arbil, northern Iraq, failed to agree on a proposed power-sharing accord on Monday, the first day of all-party talks before MPs convene on Thursday.

Faced with a list of thorny outstanding issues, they gathered on Tuesday at the Baghdad residence of Massud Barzani, president of the Kurdish regional government in the north.

But former premier Iyad Allawi, whose Iraqiya party narrowly won the March 7 election, was absent from the meeting, state television reported, adding that Iraqi Vice President Tareq al-Hashemi was also a no-show.

"Iyad Allawi and Tareq al-Hashemi were absent from the meeting although other members of their list attended," the report said.

Roz Nuri Shawis, an Iraqi deputy premier and Kurd who is close to Barzani, outlined the areas of dispute.

Quoted in Al-Sabah newspaper, he pointed to demands for constitutional amendments, reforms in the functioning of government, guarantees for the Kurds and over the future of a commission that tracks down former regime officials.

Shawis, at Barzani's request, initiated contacts with Iraq's rival camps, leading up to the three days of meetings in Arbil and Baghdad.

Ahead of the second round, newspapers were pessimistic, with a daily warning of the "gates of hell" if the country fails to emerge from the political crisis.

"Arbil Meeting: One Step Forward, Two Steps Back," was the verdict of Ad-Dustour, an independent daily.

"They repeated the same problems without offering solutions," it said. "If the politicians don't reach an agreement, then the country will go through crises and disasters."

Al-Adala warned that a continued deadlock on Iraq's political scene would only serve to invite foreign intervention.

"Some sides hope the meetings will show we are capable of resolving our own problems. But if not, the gates of hell will open up on Iraq, and every country will want to interfere and profit from our situation."

While Iraq's Shiite, Sunni and Kurdish leaders met in Arbil, three car bombings in Iraq's mainly Shiite south killed 28 people on Monday, police and military sources said.

Prime Minister Nuri al-Maliki and his chief rival Allawi attended Monday's meetings after a weekend agreement struck by the main Shiite bloc and a Kurdish coalition.

But their remarks on Monday indicated that neither Maliki nor Allawi had backed down from their positions, prolonging a deadlock that has left Iraq without a government since the polls.

Allawi accuses Maliki of monopolising power and wants constitutional amendments to lessen the influence of the premier.

In contrast, Maliki has played up respect for the constitution, which reserves maximum rights for the premier's post.

Against the background of a flare-up in violence since the end of October, Iraqiya members said their Sunni-backed party was being pressed to accept the post of parliament speaker.

An MP close to Allawi told AFP that he and Hashemi stayed away from Tuesday's meeting because they do not want to be coerced into choosing a candidate.

The Kurds — kingmakers by virtue of their seats in parliament — have been shrewdly trying to extract as many concessions as possible from both sides in return for their support.

The Kurdish coalition has reportedly thrown its backing behind Maliki.

But Barzani said at the end of the first day of talks that his bloc's final position on whom it backs as president, prime minister and parliament speaker will be announced after the Baghdad meetings.

Government spokesman Ali al-Dabbagh has said that under Saturday's deal between the National Alliance, which represents the main Shiite parties, and the Kurdish coalition, Jalal Talabani, a Kurd, would continue as president.

Maliki would continue as premier while Iraqiya would choose its candidate for parliament speaker, Dabbagh said on Sunday, while parliament would meet on Thursday to choose a speaker, the first step towards forming a new government.

Iraq's second general election since the 2003 US-led invasion ended in deadlock after none of the main parties won enough of the 325 seats in parliament to form a majority government.

Parliament has since remained in hiatus, but on October 24 the supreme court ordered MPs to resume work and choose a speaker. The constitution stipulates that a speaker, president and prime minister must be elected in that order.

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