* Parliament meeting delayed until Tuesday * Sunnis say Maliki's demands hold up speaker nomination * Maliki, with largest parliament bloc, seeks 3rd term * Insurgents attack town north of Baghdad By Ahmed Rasheed and Maggie Fick BAGHDAD, July 13 (Reuters) - Iraq's parliament failed on Sunday to break a damaging political deadlock which is holding up the formation of new government to tackle an Islamist-led insurgency raging less than 50 miles (80 km) from Baghdad. After a brief session, parliamentary officials delayed until Tuesday their efforts to reach agreement between the country's Shi'ite, Sunni and Kurdish politicians on the posts of prime minister, president and parliamentary speaker. Prime Minister Nuri al-Maliki, whose State of Law coalition is the largest individual list in parliament, is seeking a third term but faces opposition from Sunnis and Kurds who say he has ruled for the Shi'ite majority at the expense of minority communities. Even rival Shi'ite parties wish to unseat Maliki. The political impasse has been given added urgency by the Islamist-led insurgency which swept through Sunni provinces of northern Iraq last month and was only stemmed within a hundred miles from the capital. The fall of northern Sunni cities has encouraged Maliki's opponents to try to force his departure. The disagreement over Maliki's future appeared to be blocking progress on the other political posts. Sunni politicians said the main Sunni bloc put forward Salim al-Jabouri, a moderate Islamist, as their candidate for parliamentary speaker, but accused Maliki of effectively torpedoing their proposal. "We have presented our candidate for speaker and done what we should do," said outgoing speaker Osama Nujaifi. "We hold the other blocs responsible for the delay." "Once we manage to complete the democratic process to form the government this would help to stop the great destruction happening in Iraq which is jeopardising the country's unity." Iraq's political elite are under pressure from the United States, the United Nations and Iraq's own Shi'ite clerics to reach agreement so politicians can deal with the insurgency and prevent the country fragmenting on sectarian and ethnic lines. The U.N. special envoy to Iraq, Nickolay Mladenov, said the country could plunge into chaos if parliament fails to move forward on a government in Sunday's session. Violent deaths last month reached more than 2,400 -- a level comparable to the worst of the bloodshed seen during Iraq's 2005-2008 sectarian war. U.S. Vice President Joe Biden talked on Saturday with Masoud Barzani, president of the Iraqi Kurdistan Region, and discussed the need for the quick formation of a government and peaceful resolution of territorial disputes, the White House said. FIGHTING NORTH OF BAGHDAD With politics in Baghdad paralysed, and Maliki continuing in a caretaker role, the fighting has raged on. Sunni Islamist insurgents who control large parts of northern Iraq attacked a town north of Baghdad early on Sunday, seizing local government buildings, police and witnesses said. They said militants in 50 to 60 vehicles stormed the town of Dhuluiya, about 70 km (45 miles) north of Baghdad at 3.30 am (0030 GMT), taking the mayor's office and municipal council building and fighting to take control of the police station. Insurgents led by the al Qaeda offshoot Islamic State seized swathes of Iraq's northern provinces in a two-day offensive last month and have also consolidated their grip in western Iraq where they have been fighting since the start of the year. The Sunni militants were pushed back at Dhuluiya on June 14 by soldiers backed by fighters from the Shi'ite Asaib Ahl al-Haq militia, but fighting has continued and they have taken other towns. The police and witnesses said local police and tribes were battling the militants in Dhuluiya on Sunday. They said four policemen were killed in the fighting, as well as two militants and two civilians. Insurgents also bombed a bridge linking Dhuluiya to the nearby Shi'ite town of Balad to the west, they said. On Saturday, government forces launched an assault to repel Islamic State militants who had fought their way into a military base on the edge of Muqdadiya, 80 km (50 miles) northeast of the capital. Sources at the morgue and hospital in the nearby town of Baquba said they had received the bodies of 15 Shi'ite militia fighters transferred after the morning's fighting. State TV also reported 24 "terrorists" had been killed. Seven civilians including children from nearby villages were killed by helicopter gunship fire, police and medics said. The Sunni militants had moved towards the base after seizing the town of Sadur just to the north, another security source and witnesses said. They were equipped with artillery and mortars and drove vehicles including captured tanks and Humvees. In the western city of Falluja, a hospital received three bodies and 18 wounded people on Saturday after army helicopters bombed the city, government health official Ahmed al-Shami said. (Additional reporting by Raheem Salman in Baghdad; Writing by Dominic Evans; Editing by Rosalind Russell) ((Dominic.J.Evans@Thomsonreuters.com)(+961 1 983 885)) Keywords: IRAQ SECURITY/
WRAPUP 1-Iraq government talks delayed again as fighting rages
July 13, 2014