"The judicial panel decided to recount the votes in Baghdad," said Hamdiyah Al-Husseini, of the Independent High Electoral Commission (IHEC), following an appeal by incumbent Prime Minister Nuri Al-Maliki after an inconclusive March 7 poll.

A second IHEC official, Iyad Al-Kenani, confirmed that it would be a manual recount.

Al-Husseini said the recount would begin immediately but she was not sure how long it would take.

The capital accounts for 68 seats in the 325-seat Parliament, making it a key prize for parties who competed in last month's election.

A key Maliki ally said the recount was a direct result of the State of Law's appeal.

"The committee discussed all the documents and evidence that prove that there was some manipulation in voting stations," said Hassen Al-Senaed, a State of Law parliamentarian.

"The manipulation included the changing of signatures and the removal of names and numbers and changing of ballots.

"As well as witnesses who confirm this manipulation, the appeal committee was convinced on the basis of this evidence and they took the decision to recount in all stations in Baghdad," he added.

Maliki's State of Law Alliance won 26 seats in the capital according to results that have yet to be officially ratified. Iyad Allawi, a former prime minister who narrowly beat Maliki into second place nationwide, gained 24 seats in Baghdad.

Seen as a milestone as Iraq emerges from the sectarian slaughter unleashed after the 2003 US-led invasion, last month's ballot produced no clear winner.

Allawi's Iraqiya list came first with 91 seats, according to preliminary results. Maliki's Shiite-led State of Law won 89 seats while erstwhile Shiite allies grouped in the Iraqi National Alliance got around 70. Minority Kurds who enjoy virtual autonomy in the north collectively control 58 or so seats.

The blocs have been involved in negotiations to form coalitions to create a working majority in the next parliament and select a prime minister.

Maliki's alliance and the INA have been inching toward a union that could sideline Allawi, likely producing anger among Sunnis and providing fresh fuel for a stubborn Sunni-led insurgency.

"We expect that this (the recount) will change the results for the benefit of State of Law," said Kamal El-Saadi, a senior member of Maliki's coalition.

The judicial panel that ordered the Baghdad recount was established by IHEC to handle complaints from aggrieved parties about the conduct of the election.