The New York Times said that the compromise plan was promoted in Baghdad last week by Vice President Joe Biden, who is overseeing the US drawdown from Iraq, and would establish a committee to decide major political conflicts.

The paper quoted an unnamed senior official as saying the plan could result in a new government finally being formed in Baghdad within the next month, and that Secretary of State Hillary Clinton would travel to Iraq at that time.

There was no immediate comment on the report from the White House, the State Department or Vice President Biden's office.

Maliki's State of Law Alliance, a Shiite grouping, gained two fewer seats in March's election than Iraqiya, a broadly secular coalition with strong Sunni backing led by ex-premier Iyad Allawi, a Shiite.

But neither man has managed to gain a working parliamentary majority despite months of coalition negotiations, leaving the nation's politics in limbo amid growing public frustration at the lack of progress.

The deadlock has coincided with the end of US combat operations with Iraq and fed fears that the political vacuum could offer an opening to extremists to further destabilize the country.

The Times report said that the new plan would amend the structure of the Iraqi government by adding extra restraints to the authority of the prime minister's office.

It would also establish a new committee with authority to approve military appointments, frame security policy and approve appointments in the military, the report said.

The paper cautioned however that doubts remained whether the United States, with its waning influence in Iraq, can close the deal.

earlier related report
Iraq agrees to compensate US victims of Saddam
Baghdad (AFP) Sept 11, 2010 - Iraq has agreed to financial compensation for Americans who say they were mistreated by executed dictator Saddam Hussein's regime during the 1990-91 Gulf war, the US embassy said on Saturday.

"The agreement was signed on September 2," US Embassy spokesman David Ranz said.

He could not confirm the size of the settlement, but the Christian Science Monitor reported that Baghdad had agreed to hand over 400 million dollars (314 million euros) in compensation.

The deal was signed between Iraqi Foreign Minister Hoshyar Zebari and US Ambassador to Baghdad Jim Jeffrey.

Iraq's August 2, 1990 assault on neighbouring Kuwait was rapidly met with a concerted international military response that pushed Saddam's forces out of the emirate and eventually ended in his ouster by a US-led coalition in 2003.

Several US citizens were held by Saddam's regime during the war over Kuwait and used as human shields to deter coalition attacks, with some claiming they were mistreated and tortured by Saddam's forces.

"The agreement was signed between the two countries to resolve several legal claims inherited from the former regime for US citizens," Iraq's foreign ministry said in a statement on its website.

It said the deal was part of efforts to "end the provisions of Chapter 7" of the UN Charter, which currently regards Iraq as a threat to international security and requires that sanctions be imposed upon it.

Since 1994, when the United Nations set up a reparations fund, Iraq has repaid 30.15 billion dollars (24 billion euros) to Kuwait, with a further 22.3 billion dollars (17.5 billion euros) in compensation still due.

Baghdad is required to put five percent of its oil and gas revenues into the fund.

Those obligations remain crippling to a country where infrastructure and the economy are in dire need of rebuilding after having been hammered by years of violence and sanctions.

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