BAGHDAD, Iraq - A Shiite negotiator reported progress Friday in constitutional talks with the Sunni Arabs and Kurds on federalism but problems on the proposal to ban members of Saddam Hussein's Baath Party from public life.
Negotiator Jawad al-Maliki said the issue, known here as "de-Baathification," was especially difficult because it was something "we cannot drop."
"We will not be easy with this point at all," al-Maliki said. The Sunnis were being tough in defending the rights of former Baath Party members, he said, and "it is regrettable to us that the Sunnis and the Baath are in the same pot."
The progress came after Shiite negotiators, prodded by President Bush, offered what they called their final compromise proposal to Sunnis to try to break the impasse over the draft constitution, a Shiite official said.
Bush telephoned a key Shiite leader, Abdul-Aziz al-Hakim, on Thursday to urge consensus over the draft, Abbas al-Bayati told The Associated Press.
Al-Maliki said there had been progress on the issue of federalism after Shiites guaranteed that the parliament to be elected in December would take up the issue first.
Sunni negotiator Kamal Hamdoun said he and his Sunni colleagues were "studying the suggestions that we received."
Asked when they would respond, he said: "Maybe tomorrow."
The constitution bans Saddam's party and "its symbols" and grants legal status to a committee responsible for purging Baath members from government and public life. Sunnis dominated party ranks.
Earlier in the day, U.S. Ambassador Zalmay Khalilzad and Kurdish mediator Barham Saleh were seen arriving at a Green Zone residence where top Shiites were huddling.
Al-Bayati said the concessions were on the pivotal issues of federalism and the Baath Party, adding: "We cannot offer more than that."
Iraq's Sunni vice president said the current draft was written only by Shiites and Kurds and is "far from the aspirations of all Iraqi people."
Under a federal system, the provinces would have significant powers, in contrast to Saddam's regime in which Sunnis dominated a strong central government.
The Sunnis have demanded a limit of three provinces, the number the Kurds have in their self-ruled region in the north. The Sunnis have publicly accepted the continued existence of the Kurdish regional administration within its current boundaries.
But without limits, Sunnis fear not only a giant Shiite state in the south but also future bids by the Kurds to expand their region, as they have demanded. That would leave the Sunnis cut off from Iraq's oil wealth in the north and south.
Sunnis had insisted that the issue of dividing Iraq into federated regions be deferred until after the December parliamentary election. Many Sunnis boycotted the Jan. 30 election for the current parliament, which is dominated by Shiites and Kurds.
The issue of federalism is complex, and some key Sunnis have taken a harder line against it than their negotiators. Some Sunni clerics have also condemned as anti-Islamic parts of the document their own negotiators have accepted.
"Don't follow constitutions of the infidels," influential Sunni cleric Sheik Mahmoud al-Sumaidaei told the congregation Friday at the Umm al-Qura mosque. "We don't want a constitution that brings the curse of separation and division to this country."
Al-Bayati and fellow Shiite negotiator Ali al-Adeeb, a Shiite member of the constitutional committee, said Bush telephoned al-Hakim after Shiites said the negotiations were deadlocked and the draft submitted Monday to parliament should go to the voters in the Oct. 15 referendum as is.
Bypassing the Sunnis would risk a backlash among the community at the core of the insurgency and which the Americans want to encourage to join the political process.
Al-Adeeb said Khalilzad had also appealed to the powerful Shiite clergy, including Grand Ayatollah Ali al-Sistani, to help resolve the standoff.
The White House confirmed that Bush made the call prior to the midnight Thursday deadline, but refused comment on the latest compromise proposal.
Bush's call "reflects ... that this is an Iraqi process and that the United States is here to help them," said Bush spokesman Trent Duffy. Bush had urged that a consensus be found.
With no sign of progress Thursday, Shiite officials said they believed talks were at a standstill and there was no legal requirement anyway to have parliament vote on a draft that was approved Monday by the Shiites and Kurds.
Following Bush's call, parliament speaker Hajim al-Hassani announced officials would try again to reach unanimity Friday.
Al-Adeeb said al-Hakim told Bush the Shiite bloc was made up of several groups "and they might reject the constitution if the article on the Baath Party is removed."
That appeared to be a play for time to allow consultation with al-Sistani, who wields vast influence among Iraqi Shiites.
Shiites suffered under Saddam and hatred for the party runs deep. A move by former Prime Minister Ayad Allawi, a secular Shiite, to quietly reinstate some former Baath members in the security services cost him considerable Shiite support, and his party fared poorly in the election.
Al-Sistani and the Shiites have bedeviled the Americans over the constitution issue since the early weeks of the occupation. The Bush administration wanted a constitution written as quickly and in 2003 suggested a panel of Iraqi legal experts draft it.
But the powerful al-Sistani decreed that no constitution written by unelected officials was acceptable, and the Americans dropped the idea.
U.S. officials then wanted the document written by an assembly whose members would be chosen in a series of regional caucuses. Al-Sistani objected to caucuses and that idea was dropped.
It is ironic that the Americans are urging the Shiites to make concessions over the purging of his allies. That suggests the Bush administration is eager for some kind of constitution as a sign of progress at a time of growing disaffection within the United States over the Iraq war.
The United States had pressed the Shiites and Kurds to accept 15 unelected Sunni negotiators on the drafting committee last spring to ensure that the pivotal community was represented. Sunni Arabs form the core of the insurgency.
On Friday, about 5,000 people, some carrying Saddam's picture, rallied in the mostly Sunni city of Baqouba to protest the draft constitution. The rally was organized by the Sunni Iraqi National Dialogue Council.
Although the constitution requires only a simple majority in the referendum, if two-thirds of the voters in any three of Iraq's 18 provinces reject it, the charter will be defeated.
Sunni Arabs are about 20 percent of the national population but form the majority in at least four provinces. Sunni clerics have begun urging their followers to reject the charter in the referendum if Sunni interests are not served.
If voters reject it, parliament will be dissolved and elections held by Dec. 15 to form a new one. The new parliament then starts drafting a new constitution.
Also Friday, insurgents in Mosul ambushed a convoy of three vehicles of a type often used by foreign contractors, and one was destroyed by a rocket-propelled grenade, witnesses said.