BAGHDAD, 7 March 2004 — Iraq’s leaders postponed yesterday formal talks on an interim constitution for the weekend, after failing to meet a deadline for its signing the previous night due to last-minute ethnic and political disarray.

US President George W. Bush said yesterday that violence and political disagreements in Iraq will not stop progress toward democracy, amid warnings that failure to meet a new deadline for signing an interim constitution could affect the country’s future.

Members of the US-appointed Governing Council said they hoped to sign the new basic law tomorrow and implied informal talks outside the 25-strong body would be ongoing.

But some council members warned the whole agreement was now in danger.

However, speaking in his weekly radio address recorded Friday, Bush said the public debate signaled an emerging spirit of democracy in Iraq.

“The Iraqi people are making excellent progress,” he said.

“Members of the Governing Council are having a free and open and spirited debate as they complete a new framework for governing their nation. This transitional administrative law will result in protecting the rights of all Iraqis, and will move the country toward a democratic future,” he said.

The suspension of the signing abruptly halts progress toward the planned transfer of sovereignty from the US-led coalition to an interim Iraqi administration on June 30.

The basic law, to become effective on July 1, is aimed at seeing Iraq through a transitional period and into next year. It provides for a federal state with two official languages, where Islam will be a source of legislation but not its foundation.

The delay arose Friday after Shiite leaders objected to a clause in the document that could give Kurds veto power in a future referendum on a permanent constitution.

According to Mahmoud Othman, a Kurdish representative on the Governing Council, the price of failure could be very high.

“I think it would be very damaging,” he said yesterday.

“We would have to rediscuss the whole thing all over again. If there is no signing of this document it could even affect the June 30 transfer of sovereignty,” he said.

The Shiite objections came after consultations with their community’s revered spiritual leader, Grand Ayatollah Ali Al-Sistani, said a source close to the talks.

“The problem now is that if people think they can ask for more at the last minute, it may prompt others who compromised their position before to change their mind and demand more as well, so the whole process would fall apart,” the source warned.

The other Governing Council members have given the dissenters two days to consult with religious leaders about how best to proceed, the source added.