Even as insurgent groups were insisting the only binding law for Iraq should be the Quran and issuing threats to kill all secular politicians involved in drawing up nation’s awaited constitution, the U.S., in an effort to meet tomorrow’s deadline, conceded an expanded role for the Islamic religion in all future legislation.

Negotiators for the leading factions – Shi’ites, Sunnis and Kurds – agreed that Washington’s new position gives Islamic law a larger role in Iraq than it has presently or had under Saddam Hussein’s regime.

In the absence of a completed constitutional draft to present to parliament tomorrow, the elected body faces dissolution, requiring another round of elections and negotiations from scratch for a new constitution. Negotiators have already been laboring under a one-week extension from parliament in an effort to resolve the outstanding issues of federalism and sharing of oil revenues.

Negotiators are also laboring under the threat of death at the hands of Islamist insurgents who claim the only valid law is the Quran and the only acceptable form of government is an Islamic Republic.

“We will harshly retaliate against anyone who participates and encourages the writing of the constitution and therefore to rule against God’s way,” read the statement received yesterday from Abu Maysara Al-Iraqi, usually described as head of al-Qaida’s “media department” in Iraq.

Another group, the “Islamic Tribunal of the Organisation of al-Qaida in the Land of Two Rivers” warned on its website that it had “decided to apply the order of Allah: Kill whoever assumes the right to be a partner of God and draws up a null and void constitution.”

The Bush administration has insisted Iraqis have the right to form their own government but has, at the same time, explicitly said it would not countenance the kind of clerical rule that took root in Iran.

Now, despite its long-held position – and in the face of insurgent threats – Washington has signaled its willingness to make “Islamic principles” the standard for legislation.

According to one Sunni negotiator, Saleh al-Mutlak, the agreement means parliament could pass no legislation that “contradicted Islamic principles.” An official of one major Shi’ite Islamist party in the interim government told the Scotsman any disputes would be determined by a constitutional court.

“The Americans agreed, but on one condition – that the principles of democracy should be respected,” Mutlak said, adding his continued opposition to federalism.

Kurdish negotiators, who oppose making Islam the ultimate source of law or subjecting legislation to religious tests, are outraged at Washington’s apparent flip-flop.

“We understand the Americans have sided with the Shi’ites,” one secular Kurdish politician said. “It’s shocking. It doesn’t fit American values. They have spent so much blood and money here, only to back the creation of an Islamist state. I can’t believe that’s what the Americans really want or what the American people want.”

Kurdish leaders expressed concerns that U.S. Ambassador Zalmay Khalilzad, who helped draft a constitution in his native Afghanistan that likewise forbade any law to violate Islamic principles, had fallen under the sway of Shi’ite parties who appealed to that precedent.

“We don’t want dictatorship of any kind, including any religious dictatorship'” declared the Kurdish politician. “Perhaps the Americans are negotiating to get a deal at any cost, but we will not accept a constitution at any cost.”

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