BBC NEWS | Middle East | Battle lines drawn in Iraq federal row: "The live television feed from the Iraqi parliament was cut on Thursday amid rowdy scenes over federalism."

There is a 22 October deadline for resolving the process on achieving federal autonomy.

The main issues are two main issues, power and oil. Power sharing can run from a single Iraq, strong government in Baghdad with some devolved federal powers to the provinces, through weak central government and most powers devolved, and finally separation into three countries: Kurdish North, Sunni Middle, Shia South.

The main power the argument is about is control of oil revenue: the Kurdish North and Shia South have oil, but the Sunni center doesn’t, except in the disputed area around Kirkuk.

The Shia are not fully united in their own thoughts for federalism, with the Badr militia of the Supreme Council for the Islamic Revolution in Iraq (SCIRI) wanting a strong Shia region "to stop injustice coming back," according to its leader, Abdel Aziz al-Hakim. He wants all nine provinces South of Baghdad together.

The other Shia militia is the Mehdi army, led by Moqtada al-Sadr. He wants to keep Iraq united, and thus seems to be finding some common ground with the Sunnis. Both Shia groups have links with Iran. Many Shia throughout Baghdad and other Sunni areas fear they would be abandoned if the Southern Shia were to separate.

One discussed compromise would allow only smaller groups of three or fewer provinces to band together, with security to remain with the central government.

A similar decision must be made about the oil fields around Kirkuk, where many Kurds were ethnically cleansed by Saddam, but are now repopulating the area and preparing to claim domination over it.

Analysis:
While these sectarian and oil revenue problems were inevitable in any post-Saddam scenario, I call it as two failures of the Bush and Bremer Iraq plans. The first failure was not creating an Oil Fund, like Alaska has, for all Iraqis -- which would have reduced the “war for oil” that the Sunnis and Shia are now fighting. The Kurdish Peshmerga, who enforce movement restrictions against Arabs in the North, have so far avoided much fighting except in mixed Mosul. They seem prepared to argue very strongly for Kirkuk,

The second liberation failure is the support for proportional representation, which means in practice voters choose between various party lists. This is in contrast to America, where voters vote in geographic areas for a local representative. Where proportional representation is used, the minority extremist “identity politics” parties have much greater influence -- in Israel, in Slovakia, and in Iraq.