The decision paves the way towards finalising a date for the second national vote since the American-led invasion that ousted Saddam Hussein from power in 2003, a poll seen as crucial to ensuring a complete US military exit in 2011.

The law was passed after weeks of delays and following huge pressure from the United Nations, religious leaders and Washington.

"This is an important milestone as the Iraqi people continue to take responsibility for their future," Obama said, stressing the US will continue to stand by the country invaded by his predecessor George W. Bush.

"I want to congratulate Iraq's leaders for reaching this agreement," Obama added.

US ambassador Christopher Hill said an election date of January 23 is now probable. He spent all Sunday engaged in intense lobbying at parliament encouraging rival camps to set aside their disputes over the law.

Key to approval were provisions governing the conduct of the vote -- originally slated for January 16 -- in Kirkuk, a disputed and ethnically-mixed province of Kurds, Sunnis and Turkmen.

An open voting system will be used in which electors can choose an individual named candidate, which favours high-profile politicians, or a political party of their choice.

The law also guarantees that at least 25 percent of MPs will be women and allocates at least eight parliamentary seats for Iraqi minorities, including five for Christians.

Prime Minister Nuri al-Maliki said the electoral law is "a strong response to the terrorists and thugs of the former regime" of Saddam and "those who are trying to undermine Iraq's security and political process."

MPs decided the election result will be provisional in Kirkuk and other provinces where there is disagreement over electoral rolls because of a high recent increase in respective Kurd and Arab populations.

Kirkuk's majority Kurds have long demanded incorporation into the region, arousing fierce opposition from the province's Arabs and Turkmen, who say the overthrow of Saddam prompted massive demographic change.

Arabs and Turkmen say a huge number of Kurds have settled in Kirkuk in the subsequent six years but they contend they were only returning to an area from which they had been forced out of during the now executed dictator's reign.

A committee of parliamentarians, officials from government ministries and Iraq's Independent High Electoral Commission (IHEC) with the help of the UN, will have one year to review the vote in Kirkuk and cancel fraudulent ballots.

Amid frenzied scenes the parliament's vice president Khaled al-Attiya said on state television that 141 of the 195 members present voted for the document.

The election is viewed as critical to consolidating the war-torn nation's fledgling democracy ahead of a withdrawal of US combat troops by August next year and a complete pullout by the end of 2011.

"The view of the UNAMI (United Nations Assistance Mission for Iraq) is that (the election) can take place in January," US ambassador Hill told reporters in a conference call from Baghdad, mentioning January 23 as the likely date.

"We're good to go on a January date," he said.

Hill underlined the seriousness of passing the electoral law by admitting that further hold ups could have disrupted the timeline for the US troop withdrawal.

"The drawdown can (now) be done according to schedule," he said.

"What was the concern of course was had these deliberations gone on, then new decisions would have had to be made about the drawdown."

Hamdiyah al-Husseini, a high ranking IHEC official, said the scheduled January 16 date is too soon for the vote.

"The election cannot take place on time and a new date will be chosen," she said.

Constitutionally, the election must be held by January 31.

earlier related report
Iraqi MP expenses scandal triggers religious outrage
Baghdad (AFP) Nov 6, 2009 - An expenses scandal erupted in Iraq on Friday after religious leaders hit out at how MPs secured themselves numerous lavish perks while failing to ensure the nation's general election goes ahead.

Clerics said parliamentarians had approved legislation guaranteeing diplomatic passports for them and their families, as well as land and generous salaries and pensions, instead of ensuring a stalled electoral bill is passed.

Iraq's presidential council, which normally rubber stamps legislation, said this week it twice opposed MPs' attempts to secure the privileges but had been powerless to stop the law being approved at its third reading.

Under the law, an MP will have a monthly budget of around 25,500 dollars (17,230 euros) encompassing a salary of 8,450 dollars and allowances for up to 30 staff, primarily security.

They will receive 80 percent of their MP salary as a pension for 10 years after they retire, as well as a plot of land of up 600 square metres, Baha al-Araji, a Sadrist MP and chair of the parliamentary committee responsible for shaping legislation told AFP.

In addition they will not have to repay a one-off loan for up to 60,000 dollars to buy vehicles including armoured cars. They were eligible for the money under a law passed at the height of the country's sectarian insurgency.

The presidential council took the unusual step of distancing itself from the legislation in response to vituperative press comment over the numerous benefits MPs had discussed and approved during closed door sessions.

Under Iraq's constitution, the council can block legislation twice but MPs are then free to approve it if there is at least 60 percent support.

But the new law was criticised by prominent cleric Sadr al-Din al-Qubanji, close to Ammar al-Hakim, leader of the Supreme Iraqi Islamic Council, Iraq's biggest Shiite party, for sending the wrong message to voters.

"We have a big question mark towards members of parliament who vote with unanimity on laws that serve their own interests," said Qubanji in the holy city of Najaf.

"Why is there not such unanimity on the election law?" he added, referring to legislation designed to regulate national polls planned for January 16, which could yet be delayed due to parliamentary stalemate.

Mahmud Othman a prominent MP and member of the Kurdish alliance said the expenses law had been badly handled.

"I was against the privileges from the beginning and told them not to ask for passports or land because we are under criticism and this will put us under more criticism," he told AFP.

"I requested that these matters be subjected to open sessions in parliament and not secret sessions as it would double (the effect) of such claims," he added.

In Karbala, meanwhile, also a holy city, an aide to Grand Ayatollah Ali Husseini al-Sistani, Iraq's top Shiite cleric, heaped more criticism on parliamentarians' actions.

"There are a large number of MPs voting for their own diplomatic privileges," Ahmed al-Safi said.

"When someone acts that way it is difficult to preserve the interests of his own country."

The head of the Iraqi electoral commission, Faraj al-Haidari, said on Thursday it is now too late to organise a general election for January 16 after repeated delays by MPs in adopting the electoral law.

The final word on the timing of the poll rests with parliament, which meets again on Saturday, but Haidari's comments are likely to put pressure on MPs to push the date back towards the constitutional deadline of January 31.

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