BAGHDAD -- Iraqi MPs on Sunday approved a law to govern the country's general election in early 2010, paving the way to finalize a date for a vote seen as crucial ahead of a US military exit from the country.

The law was passed after weeks of delays and following huge pressure from the United Nations, religious leaders and the United States, with intense lobbying at parliament on Sunday from American ambassador Christopher Hill.

US President Barack Obama congratulated the MPs, saying the law is an important step towards ensuring a lasting peace.

Key to approval were provisions governing the conduct of the vote -- slated for January 16 but now likely to be put back -- in Kirkuk, a disputed and ethnically-mixed province of Kurds, Sunnis and Turkmen.

The MPs decided the election result will be provisional in Kirkuk and other provinces where there is disagreement over electoral rolls because of a high recent increase in respective Kurd and Arab populations.

Kirkuk's majority Kurds have long demanded incorporation into the region, arousing fierce opposition from the province's Arabs and Turkmen, who say the overthrow of dictator Saddam Hussein in 2003 led to massive demographic change.

Arabs and Turkmen say a huge number of Kurds have settled in Kirkuk in the subsequent six years but they contend they were only returning to an area from which they had been forced out of during Saddam's reign.

A committee of parliamentarians, officials from government ministries and Iraq's Independent High Electoral Commission (IHEC) with the help of the UN, will have one year to review the vote in Kirkuk and cancel fraudulent ballots.

The final law was a compromise as Kurds favored using current voter registration lists and keeping Kirkuk as one electoral constituency. Arabs and Turkmen wanted 2004 or 2005 records to be used, or for Kirkuk to be split into two constituencies.

Amid frenzied scenes the parliament's vice president Khaled al-Attiya said on state television that 141 of the 195 members present voted for the document.

"After a long wait and intense efforts the parliament managed to produce a text acceptable by everyone on the electoral law," he said moments before voting began.

"It is a very important achievement for the parliament," he added.

The election is viewed as critical to consolidating the war-torn nation's fledgling democracy ahead of a withdrawal of US combat troops by August next year and a complete pullout by the end of 2011.

"There is a time for discussion and there is a time for decision," said US ambassador Hill, who spent the entire day moving between MPs from different camps, prior to the vote, underlying its importance.

"Today is a time for decision," he added.

However, Hamdiyah al-Husseini, a high ranking IHEC official said weeks of delays caused by wrangles over the electoral law mean the scheduled January 16 date is too soon for the vote, the second national poll since Saddam's fall.

"The election cannot take place on time and a new date will be chosen," she said.

The electoral law was supposed to be in place 90 days before voting takes place. Constitutionally, the election must be held by January 31.