BAGHDAD (Reuters) - Iraq's parliament should confirm a new government in office on Saturday, ending months of inertia that have seen sectarian bloodshed mount and launching a crucial new phase in the U.S.-backed project to install democracy.

An Iraqi member of Parliament asks for permission to speak, in Baghdad, May 10, 2006. Iraqi leaders have agreed on a national unity government to be presented to parliament on Saturday, negotiators said on Friday, adding that the key interior and defense ministries would be filled later. [Reuters]

Aides to Shi'ite Prime Minister Nuri al-Maliki and senior negotiators said a basic deal was struck in talks late on Friday that left the key posts of interior and defense minister vacant.

There may be some fine-tuning at the last minute but, with jobs for nearly all parliamentary groups barring small Shi'ite and Sunni parties that refused to join, parliamentary approval for Maliki's ministers is likely to be a formality.

The government can be sure of an enthusiastic welcome in Washington, where frustration with Iraqis' sectarian and ethnic haggling has grown over the five months since an election hailed as a final step from

Saddam Hussein's dictatorship to democracy.

"For the first time, Sunnis, Kurds and Shias participate with a four-year mandate," a senior U.S. official said in Washington. "This is an opportunity to make some changes."

For President George W. Bush, who launched the invasion in 2003 in the name of Iraqi freedom and ending a perceived threat from Saddam, stability is key to bringing home 130,000 American troops -- a move that might stem his falling approval ratings.

Iraqis too, who turned out in large numbers across all the rival communities, have been growing impatient for a leadership that can address their massive problems -- security certainly, but also a devastated economy and poor basic public services.

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