The bloc, led by former Premier Iyad Allawi, said it was suspending its participation in parliamentary business in protest at what it charged was Prime Minister Nuri Al-Maliki's monopolization of all decision-making.

"We can no longer remain silent about the way the state is being administered, as it is plunging the country into the unknown," said the bloc, which holds 82 of the 325 seats in Parliament, second only to Al-Maliki's National Alliance.

"The Iraqiya bloc is suspending its participation in Parliament from Saturday and calling for the opening of a round-table to find a solution that will support democracy and civil institutions," it said.

"Iraqiya rejects this system of policy-making that consists of ignoring other political parties, politicizing the justice system, exercising sole power and violating the law."

The bloc accused the Al-Maliki government of "placing tanks and armored cars in front of the homes of Iraqiya leaders in the Green Zone," the heavily fortified central Baghdad district that houses the official residences of leading politicians and government ministers as well as the British and US embassies.

"This sort of behavior drives people to want to rid themselves of the strong arm of central power as far as the constitution allows them to," it said in allusion to moves by majority Sunni Arab provinces to take up the option of similar autonomy to that enjoyed by the Kurds in northern Iraq.

Votes in favor of autonomy by the provincial authorities in Anbar, Salaheddin and Diyala have drawn an angry response from the prime minister.

When Salaheddin provincial council voted in October to push for autonomy, Al-Maliki retorted that it "does not have the right to announce this."

"Federalism is a constitutional issue," he said, insisting that the provincial council should have presented a request to the Cabinet, which would then present it to Parliament.

Article 119 of the Iraqi constitution states: "One or more governorates shall have the right to organize into a region based on a request to be voted on in a referendum submitted in one of the following two methods."

These are: "A request by one-third of the council members of each governorate intending to form a region," or "a request by one-tenth of the voters in each of the governorates intending to form a region."

The walkout by Iraqiya MPs represents one of Iraq's most serious political crises and comes a day after US forces handed over control of their last remaining base.

The Shiite group of firebrand cleric Moqtada Sadr said it was ready to undertake a "mediation mission to try to secure a change of heart."

"Taking that sort of decision a day after the end of the US occupation is going to light the fire of division and we will do all can to put it out," said the leader of the movement's parliamentary bloc Baha Al-Araji.

In a separate development, Iraqi officials said a Lebanese Hezbollah commander allegedly responsible for killing four US soldiers will be prosecuted for illegal entry with a forged passport.

Ali Musa Daqduq was the last prisoner in US custody in Iraq and was handed over to Iraqi authorities on Friday.

On Saturday, two Iraqi officials said Daqduq will be prosecuted for illegal entry with a forged passport — the only Iraqi charge against him. But the officials said an investigative judge will consider US allegations against him. The officials spoke on condition of anonymity because of the sensitivity of the matter.

Daqduq has been linked to a brazen raid in which four American soldiers were abducted and killed in the Iraqi city of Kerbala in 2007.