(Reuters) – Iraq’s parliament sits on Monday for the first time since inconclusive March elections but it could be weeks before a government is formed that can tackle worsening insurgent violence.

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Iraqis hoped the March 7 election would bring stability as the United States prepares to end combat operations in August ahead of a full troop pullout by the end of 2011.

Instead, weeks of sniping and challenges to the result have exposed the growing pains of Iraq’s nascent democracy, with the chief factions at loggerheads over who gets to lead the government.

Overall violence has dropped sharply since the height of sectarian warfare in 2006-07 but there has been a steady rise in casualties in the past two months, as insurgents try to exploit the political deadlock.

The 325-seat parliament will hold its inaugural session under increased security after gunmen attacked the Iraqi central bank on Sunday, killing at least 15 people.

“Such national occasions definitely will a target for enemies of the democratic process in Iraq,” Baghdad security spokesman Major General Qassim al-Moussawi told reporters.

Emerging from decades of war, sanctions and isolation, Iraq desperately needs stability to restore basic services and foster economic growth on the back of multibillion dollar oil deals. Much-needed legislation, including laws on the oil sector, has been languishing in draft form for years.

Former Prime Minister Iyad Allawi led his cross-sectarian Iraqiya alliance to a narrow victory in the election, with strong support from Iraq’s once-dominant Sunni minority.

But he fell short of an outright majority and faces being sidelined by a tie-up between the main Shi’ite blocs — State of Law led by incumbent Prime Minister Nuri al-Maliki and the Iraqi National Alliance (INA), which includes Sadr.

Allawi says sidelining the Sunni minority completely could fuel the insurgency that still grips Iraq seven years after a U.S.-led invasion toppled Sunni dictator Saddam Hussein.

The rival Shi’ite bloc, which is itself four seats short of a majority, has yet to agree who will lead the bloc or be prime minister and Maliki is resisting INA pressure to step aside.

The Shi’ite bloc is meanwhile seeking to draw away Sunni deputies from Iraqiya to give it a majority in parliament.

Allawi has threatened to mount a legal challenge to the Shi’ite coalition if it attempts to form a government before his bigger non-sectarian group is given the chance.

Against this background, Monday’s parliamentary session will be largely protocol, and could drag on for weeks as the factions haggle over the posts of president, prime minister and speaker of parliament, as well as more than 30 cabinet posts.

“Tomorrow’s session will be protocol, swearing in, and I think the head of the session will keep it open until a political understanding identifies a deal,” said Qusay al-Suhail, a senior official of a Shi’ite bloc led by firebrand anti-U.S. cleric Moqtada al-Sadr.

“I expect that the session will remain open for a month until a degree of understanding is reached,” he told Reuters.

(Additional reporting by Ahmed Rasheed; Writing by Matt Robinson; Editing by Jon Boyle)

BAGHDAD, June 13 (Reuters) – Iraq’s parliament sits on Monday for the first time since inconclusive March elections but it could be weeks before a government is formed that can tackle worsening insurgent violence.

Iraqis hoped the March 7 election would bring stability as the United States prepares to end combat operations in August ahead of a full troop pullout by the end of 2011.

Instead, weeks of sniping and challenges to the result have exposed the growing pains of Iraq’s nascent democracy, with the chief factions at loggerheads over who gets to lead the government.

Overall violence has dropped sharply since the height of sectarian warfare in 2006-07 but there has been a steady rise in casualties in the past two months, as insurgents try to exploit the political deadlock.

The 325-seat parliament will hold its inaugural session under increased security after gunmen attacked the Iraqi central bank on Sunday, killing at least 15 people.

“Such national occasions definitely will a target for enemies of the democratic process in Iraq,” Baghdad security spokesman Major General Qassim al-Moussawi told reporters.

Emerging from decades of war, sanctions and isolation, Iraq desperately needs stability to restore basic services and foster economic growth on the back of multibillion dollar oil deals. Much-needed legislation, including laws on the oil sector, has been languishing in draft form for years.

Former Prime Minister Iyad Allawi led his cross-sectarian Iraqiya alliance to a narrow victory in the election, with strong support from Iraq’s once-dominant Sunni minority.

But he fell short of an outright majority and faces being sidelined by a tie-up between the main Shi’ite blocs — State of Law led by incumbent Prime Minister Nuri al-Maliki and the Iraqi National Alliance (INA), which includes Sadr.

Allawi says sidelining the Sunni minority completely could fuel the insurgency that still grips Iraq seven years after a U.S.-led invasion toppled Sunni dictator Saddam Hussein.

The rival Shi’ite bloc, which is itself four seats short of a majority, has yet to agree who will lead the bloc or be prime minister and Maliki is resisting INA pressure to step aside.

The Shi’ite bloc is meanwhile seeking to draw away Sunni deputies from Iraqiya to give it a majority in parliament.

Allawi has threatened to mount a legal challenge to the Shi’ite coalition if it attempts to form a government before his bigger non-sectarian group is given the chance.

Against this background, Monday’s parliamentary session will be largely protocol, and could drag on for weeks as the factions haggle over the posts of president, prime minister and speaker of parliament, as well as more than 30 cabinet posts.

“Tomorrow’s session will be protocol, swearing in, and I think the head of the session will keep it open until a political understanding identifies a deal,” said Qusay al-Suhail, a senior official of a Shi’ite bloc led by firebrand anti-U.S. cleric Moqtada al-Sadr.

“I expect that the session will remain open for a month until a degree of understanding is reached,” he told Reuters. (Additional reporting by Ahmed Rasheed; Writing by Matt Robinson; Editing by Jon Boyle)