BAGHDAD &

Iraqi lawmakers adjourned for the month today after failing to agree on a provincial election law, casting doubt on whether U.S.-backed balloting can be held in the country's 18 provinces this year.




The development is a setback to U.S. hopes for reconciliation among rival communities despite the decline in violence.




The decision to go into summer recess came after lawmakers failed to break a deadlock over Kurdish opposition to a power-sharing formula for the northern oil-rich city of Kirkuk despite days of intense negotiations and heavy pressure from U.S. and U.N. officials.




Officials involved in preparations for the elections &

which the U.S. believes are necessary for national reconciliation &

have said such a delay would likely push voting to next year.




Deputy parliamentary speaker Khalid al-Attiyah, however, insisted the provincial elections could be held this year as long as the legislation is passed in September.




Parliament speaker Mahmoud al-Mashhadani said the lawmakers will resume sessions on Sept. 9. Meanwhile, he said, a committee will continue negotiations over the provincial elections law.




The legislature also adopted a supplementary budget of $21 billion. Adoption of the elections law had been linked with the budget proposal, which needed to be approved before the lawmakers could adjourn, according to the constitution.




Parliament adjourned for the summer break last week but met four days in special session to try to approve the budget and election bills.




Finance Minister Bayan Jabr has said passage of the supplemental budget would raise the overall budget to some $70 billion this year and is needed for food rations, fuel for power plants and raises for civil servants.




Approval of the budget measure came as U.S. lawmakers complained that the Iraqis were not paying enough for their own reconstruction.




A U.S. General Accounting Office report released Tuesday said Iraq could end the year with as much as a $79 billion budget surplus as oil revenues pile on top of leftover income the Iraqis still haven't spent on rebuilding.




But U.S. officials who work with the Iraqis on reconstruction said the Baghdad government has been increasing its capital spending by 30 to 35 percent each year since 2006 &

although they added that both governments want to see the pace increased.




The Iraqi government is drafting plans for Iraqi-funded projects to include 1,000 new primary health care centers over the next 10 years, new airports and a major renovation project for downtown Baghdad, the American officials said.




They spoke on condition of anonymity because they did not want to comment on Iraqi government performance.




The officials said the United States has not begun any new reconstruction projects in Iraq since 2004 and that ongoing work is funded by money approved by Congress four years ago.




The main sticking point on the election bill was Kurdish opposition to a plan that would equally divide the provincial council seats for Tamim province, of which Kirkuk is the capital, among Kurds, Turkomen and Arabs.




Kurds and their allies hold a majority on the 41-member council, with 26 seats. Kurds fear a dilution of their power as they seek to annex the oil-rich area into their semiautonomous territory to the north.




Fouad Massoum, a senior Kurdish lawmaker, held out hope that the vote could still be held this year.




"We were not the reason behind delaying the election law. We support the idea of holding elections this year," he said, accusing al-Mashhadani of ending the session without consulting them.




The U.N. had proposed a compromise in which the Kirkuk vote would be postponed to allow elections to be held in Iraq's 17 other provinces. But it also included a reference to a constitutionally mandated referendum on the status of Kirkuk that has been much delayed.




That drew opposition from Turkomen and Sunni Arabs.




"The latest U.N. proposal, issued after meetings with (Kurdish President Massoud) Barzani, was a plot aimed at strengthening the Kurds further in Kirkuk," said Aydin Aksu, the head of the Baghdad branch of the Iraqi Turkomen Front.




He said the sides had begun discussing details of the committee that will make recommendations to parliament.




Iraq's largest Sunni Arab party, the Iraqi Islamic Party, also had called for the session to be adjourned until September.




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Associated Press writers Bushra Juhi, Hamid Ahmed and Sameer N. Yacoub contributed to this report.