On his last day in Iraq, Khalilzad also clinched a compromise between the country's Shiite prime minister and Kurdish president on the status of Baath Party members. The government is Iraq's biggest employer, and thousands of Baathists lost their jobs soon after the ouster of Hussein in 2003. That became a major source of grievance among the Sunni Arab minority that makes up the backbone of the anti-U.S. insurgency.
The proposal advanced by Maliki and President Jalal Talabani would allow all but the most senior Baathists back into the military and civil service, unless they committed crimes, and provide pensions for those who do not qualify. A panel of judges would decide who was eligible.
But details remain to be worked out, acknowledged Abbas Bayati, a Shiite legislator close to Maliki. They include whether to allow former Baathists into all government institutions, and what to do if the institution that employed them has since been dissolved.
Prominent Shiites, whose sect was persecuted under Hussein, have already lined up against the draft.
"I think there will be great opposition within the parliament concerning this law, and due to its nature, it won't even be discussed," said Ali Alami, a Shiite member of the commission assigned to implement the policy.
Maliki has taken other steps to rein in violence and foster reconciliation. He persuaded the powerful Al Mahdi army, led by radical Shiite cleric Muqtada Sadr, to pull back and allow the new security plan to take effect, resulting in a modest drop in sectarian killing in the capital. And Maliki did not intervene when hundreds of Al Mahdi militiamen were arrested.
But the government has stopped short of attempting to disarm and demobilize the militia, which is blamed for kidnapping and killing thousands of Sunni Arabs in response to persistent attacks against Shiites.
Progress has been even slower on the review of the constitution promised to Sunnis, who might otherwise have refused to vote in the October 2005 referendum that approved the charter. Their participation also paved the way for elections in December of that year.
The committee assigned to conduct the review faces a mid-May deadline but began meeting only in November and has not yet proposed any new language. Sunnis are pushing for a strong central government, whereas Kurds and some Shiites are trying to retain the emphasis on regional control.
Arab and Turkmen representatives also want to delay implementation of a clause that would settle the future of oil-rich Kirkuk by referendum this year, warning that a vote could spark violence. But Kurds insist that Kirkuk was taken from them by force and want it included in their semiautonomous region. Thousands of Kurds fled the city during the 1980s and 1990s when Hussein's government moved in Arabs from the impoverished Shiite south in an "Arabization" campaign.
Justice Minister Hashim Abdul-Rahman Shibli told the Associated Press on Saturday that the Cabinet had endorsed a recommendation to relocate and compensate Arabs willing to return to their places of origin.
Shibli, a Sunni Arab from the secular Iraqi National List coalition, also announced his resignation Saturday. He cited unspecified disagreements with Maliki's government. But Osama Nujeifi, a fellow National List lawmaker, said the bloc had requested his resignation over the Cabinet decision, which was recommended by a committee that Shibli led. He said the coalition would fight the decision, which he said would stack any referendum in favor of the Kurds.
Times staff writers Ned Parker, Saif Hameed and Said Rifai in Baghdad and Peter Spiegel in Washington contributed to this report.