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Iraq's transitional national assembly broke from the past and elected a leader from its ethnic Kurdish minority yesterday as president of a country that has long been dominated by Arabs.

Jalal Talabani, 71, is a shrewd politician and militia leader from the northern Kurdish region of Iraq. Kurds make up about 20 per cent of the population of Iraq and suffered chemical attacks and other persecution under Saddam Hussein's former government.

Mr. Talabani's selection, expected for weeks, was part of a larger deal under way to share power among ethnic groups in the new Iraqi government, still held up in talks that frustrate voters more than two months after they risked their lives to elect the national assembly.

But negotiators from the major parties now appear to have most of the key posts settled in a balancing act among the country's often contentious factions: Kurds, Shia Muslims and Sunni Muslims.

Open rivalries among the groups have become more pronounced during the protracted talks. In a country still steeped in daily fighting and rampant crime, easing those tensions will be critical if Iraq is going to continue toward its first democratic government after decades of Mr. Hussein's tyranny.

Mr. Hussein and other high-ranking officials from his regime reportedly watched the parliamentary session on a television provided to them in jail.

Fighting continued throughout Iraq as the assembly met, with lethal attacks by insurgents appearing to have increased in recent days.

Possibly as early as today, Mr. Talabani and two new vice-presidents -- a Shiite and a Sunni -- are expected to appoint Shia leader Ibrahim al-Jaafari as prime minister, a more hands-on position than the president's job. He, in turn, may appoint three deputy prime ministers, expected to include a Kurd and Sunni.

Shiites are the majority in Iraq and the Shiite-led faction, which won 140 of the 275 seats in the assembly, has demanded most of the important positions.

Negotiators for the Shiites said that they hope to come out of the talks in control of the Interior Ministry, the most important security institution, as well as the Oil Ministry, by far the country's biggest moneymaker.

Sunnis have few seats in the assembly. Most Sunnis abstained from voting, either in fear of retribution from insurgents in their areas or because of calls for a boycott. But Kurds and Shiites are hoping to appeal to the country's alienated Sunnis, the backbone of the insurgency. Earlier this week, the assembly elected a Sunni as parliamentary Speaker and a Sunni may be appointed to run the Defence or Finance ministries.

Many Sunnis and Shiites are wary of surging Kurdish power.

The Kurdish faction came in second in the elections, winning 75 seats, and Kurds have demanded near autonomy in an increasing swath of the country as well as more oil money.

In addition to being a political necessity, some Shia leaders hoped the election of a Kurdish president, in a 227-to-0 vote, would be seen not as a threat but as a sign of the country's new pluralism.

"It is a good message. It shows there is change in Iraq," said Shia faction member Humam Hamoudi.

Mr. Talabani, in comments after his election, suggested that Iraq change its flag, calling the current red, green, white and black banner a symbol of the disgraced Baath Party. Such suggestions have been bitterly resisted in the past. But he also called for unity and even announced his support for a tried-and-true Arab cause, statehood for Palestinians.

"We will carry out our duties without any sectarian or racial differences," he told the assembly, calling for Iraqis to remember their "martyrs" to the old regime, whether "in the mountains of Kurdistan or the marshes of [Shia]southern Iraq."

Mr. Talabani heads the Patriotic Union of Kurdistan, one of the two major Kurdish parties. Since the early 1990s, he has ruled part of the autonomous Kurdish region in Iraq's north.

He has been a warlord, ruling the Peshmarga Kurdish militia, and had fought in a civil war against the other main Kurdish party in the early 1990s, during which he also temporarily allied with Mr. Hussein against his rivals.

He was expected to be sworn in today with the two vice-presidents elected with him, Shiite Adel Abdul Mahdi and Sunni Ghazi al-Yawar, who is the outgoing president.

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