Kurdish leaders Saturday offered to compromise over Iraq's constitution but rejected Islam as the main source of law in the new charter, even as the United States dropped its opposition to a strong role for religion.
The Kurds had been keen for language to be included in the new charter allowing them the right to self-determination, which would effectively allow them to secede from Iraq at some point in the future.
But Mahmud Othman, a Kurdish member of the constitution committee, told AFP that Kurds could bend. "If we see that our right to self-determination becomes the only obstacle in finalising the constitution, our parliament will be flexible and not be an obstacle," he said.
The conciliatory announcement appears aimed at helping Kurdish, Sunni and Shia negotiators finally forge an agreement on a new draft constitution after weeks of exhausting talks and a previous missed deadline.
But in another possible hitch to the already marathon process, Iraqi leaders were becoming engulfed in a debate over whether to make Islam "the" main source of legislation or just "a" main source.
Sources close to negotiations said the debate was triggered after the United States surprisingly dropped its opposition to enshrining Islam as Iraq's main source of legislation.
They said the US move was aimed at securing agreement on the text of a new constitution by the Monday deadline.
Washington is determined to see the date met after the first deadline was missed last Monday, fearing that any delay in the political process will benefit Sunni Arab insurgents.
"Last night's talks had a surprise element - the Americans appeared to give in to the demand from various Islamic groups that Islam be the main source of legislation," one source told AFP, adding that US ambassador Zalmay Khalilzad was present at the negotiations.
But Othman said the Kurdish leaders will oppose moves to make Islam the main source of legislation.
"We will oppose this as much as we can," he stressed. "This is politics... we believe that the constitution should not impose any ideology on the people and help develop a free society."
The role of Islam in lawmaking has proved a heavily divisive issue among negotiators, with leaders of Iraq's Shiite majority insisting religion be considered the main legal foundation, and that clerics be given political roles.
But Kurds and other secularist groups argue it would harm women's rights and Iraq's secular tradition.
One Western official said "no one is looking to establish an Islamic state. The intent is to ensure that Islam is respected in addition to other established rights."
A Western diplomat also played down the significance of a strong role for religion in the new constitution, adding that an Islam-based constitution was normal even for secular states in the region.
The Shias and Kurds have a comfortable majority in parliament and observers have speculated that they may forge a compromise on issues such as federalism and oil revenues over the heads of Sunni negotiators in order to meet Monday's deadline. But a Sunni member warned that such a deal would be rejected by voters from the disenchanted former elite in a referendum scheduled for October.
Iraq's interim law says the charter fails if two-thirds of the voters in any three provinces reject the text in the referendum.
Meanwhile, Ashraf Qazi, special Iraq representative of UN Secretary General Kofi Annan, said he opposed a decision of the Iraqi government to reinstate the death penalty.
The government has announced that three members of the al Qaeda affiliate group Ansar al-Sunna will be sentenced to death for kidnapping policemen and raping Iraqi women.