Reuters -- Iraq's Shi'ite-dominated parliament completed its work on a constitution on Sunday that was at once rejected by minority Sunnis, who said it would be thrown out in an October referendum.
The text read to parliament failed to overcome objections by Sunnis, who lost their political dominance with the fall of president Saddam Hussein, despite intense U.S. efforts to broker a compromise between Iraq's divided ethnic and religious groups.
The United States and Britain, who see approval of a constitution as key to defusing an insurgency, welcomed the draft, hailing it as a victory for democracy over extremism.
Rejection in the three of Iraq's 18 provinces dominated by Sunni Arabs would be enough to torpedo the constitution under current referendum rules.
President Jalal Talabani urged Iraqis to vote 'Yes' in the referendum -- due by October 15.
"We hope that this constitution will be accepted by all Iraqis and that it will be for everybody. We are optimistic ..." Talabani, a former Kurdish guerrilla leader who fought Saddam Hussein, told a news conference.
But he acknowledged that rejection by Sunni voters was a possibility.
"If they (Sunni voters) do participate, then the constitution will (probably) fail and new elections will have to take place to create a new drafting committee to come up with a new constitution," he told Al Arabiya television.
A Sunni Arab delegate on the drafting committee said all his colleagues on the panel objected to the draft presented to parliament.
"We have not agreed on this constitution. We have objections which are the same as we had from day one," Hussein al-Falluji, the Sunni Arab delegate, told Reuters.
"If there is no forging of the results, I believe the people will say 'No' to the 'American' constitution," he said.
President Bush on Sunday touted the merits of Iraq's new constitution but acknowledged Sunni opposition and that the referendum could spark a new wave of violence.
"Of course, there's disagreements," said Bush, who had made a personal appeal to Iraqi Shi'ites to cut a deal with Sunni Arabs. "That's their right."
Bush urged Iraqis to debate the constitution on its merits and sang the document's praises, saying it "contains far-reaching protections for fundamental human freedoms including religion, assembly, conscience and expression."
But he warned: "We can expect ... atrocities to increase in the coming months because the enemy knows that its greatest defeat lies in the expression of free people in freely enacted laws and at the ballot box."
Although Iraq's parliament adjourned without a vote, delegates in the Shi'ite- and Kurdish-dominated assembly said the draft's reading in parliament was enough to signify its acceptance.
"We tried hard to include everybody's demands but this could not be done. Some people are still opposed to some points. Even I may have some reservations," said Parliament Speaker Hajim al-Hassani.
"But now we should think of this country and its unity. Whoever wants to change something, then the referendum is the final chance. Iraqis should prepare themselves for elections."
Iraq will hold elections in December after the referendum.
The text read in parliament suggested limited concessions to the Sunnis, whose community is the seat of Iraq's insurgency.
Retreating from earlier drafts referring to Saddam's political party, it omitted the phrase "Baath party" and instead banned "the Saddamist Baath and its symbols."
Sunnis had pressed for the removal of any clauses in the draft that bar party members from public life, arguing that not all of them have blood on their hands.
The text sticks to wording that says Iraq is "part of the Islamic world and its Arab people are part of the Arab nation."
Sunnis, and some Shi'ites, who are also Arabs, wanted it to say that Iraq as a whole is part of the Arab world. The Kurds of the north are Muslims, but not Arabs.
The preamble made clear that Iraq was a federal republic. Sunnis' main objection has been to federalism, which they fear could lead to the break-up of the country and leave them with a rump state minus the rich oil zones in the north and south.
Forcing the pace as he has done for the past month to keep Iraqi leaders to a U.S.-sponsored timetable, Washington's envoy Zalmay Khalilzad was a ubiquitous presence in the meeting rooms of Baghdad's fortified Green Zone on Saturday.
Khalilzad hailed the document, saying: "The draft constitution is one of the most progressive governing documents in the Muslim world in terms of its protections of the rights of religious freedom and consciousness."
But he said he was disappointed by the Sunni reaction.
"I understand their circumstances, they are in a difficult position. There are threats of intimidation, you've seen some of them saying that they like the document, but they're afraid if they openly support it their lives could be at risk."
Britain, rotating president of the European Union, welcomed the document as a triumph for democracy over terrorism.
"The Iraqis have succeeded in drafting this constitution despite the action of terrorists who are trying to destroy the country's desire for a peaceful future," British Prime Minister Tony Blair said in a statement in London.
The Sunnis, who largely shunned a January election, giving them little voice in the present interim parliament, are now mobilising in strength for the referendum and the election.
An official of the Independent Electoral Commission of Iraq said a date for the popular vote had not yet been set, but that it was likely to take place close to a deadline of October 15.