Iran's Supreme Leader Ayatollah Ali Khamenei called on political factions in Iraq to reach a consensus on forming a new government, state television reported on Monday.

Since Iraq's election in March, its leaders have been unable to agree on a new government, raising concerns over a revival of violence between once dominant Sunnis and majority Shi'ites propelled into power after Saddam Hussein's fall in 2003.

Incumbent Prime Minister Nuri al-Maliki flew to Tehran on Monday to seek support for his bid for a new term. Shi'ite power Iran has wielded great influence in Baghdad since the fall of Saddam, who waged an eight-year war against Iran in the 1980s.

Iran's leaders have been lukewarm about backing Maliki, who they are thought to view as overly independent. Many of the Shi'ite political parties that dominate Iraq now were nurtured by Iran during their long exile under Saddam.

This month Tehran appears to have persuaded the Iran-backed movement of fiery anti-American cleric Moqtada al-Sadr to ally with Maliki to try to ensure a Shi'ite Islamist-dominated government remains in charge of its neighbour.

"All politicians and officials in Iraq should focus on formation of a new government as soon as possible," Khamenei told Maliki on his one-day visit.

The US and Iraq's Arab neighbours are nervous of Iran's growing influence in Iraq and across the Middle East.

Arab nations want Maliki to form a national unity government that would include the cross-sectarian, Sunni-backed Iraqiya bloc that won 91 seats in Iraq's 325-seat assembly, the largest number. Maliki's State of Law won 89 seats.
The country is entering a new phase of uncertainty ahead of a full withdrawal of US troops from Iraq by the end of next year. But Khamenei said "the occupiers" were the source of insecurity in Iraq.

US and Iraqi officials often accuse non-Arab Iran of stirring up trouble in Iraq by allowing arms, agents and money to cross its borders. Tehran denies the allegations.

In Washington, State Department spokesman P J Crowley said the US hoped Iraq could move quickly to form its new government, and cautioned against any "over-interpretation" of Maliki's visit.

"We believe that this should be an issue that is resolved inside Iraq, by Iraqi leaders, working on behalf of their constituencies and working for the interests of Iraq -- and no other country," Crowley told a news briefing.

Tehran and Washington cut diplomatic ties shortly after Iran's 1979 Islamic revolution. Washington has led diplomatic efforts to isolate Iran over its nuclear activities, which it says are a cover to build bombs, a charge denied by Iran.

"I wish the almighty God ends America's menace over Iraq as soon as possible ... it will solve the Iraqi nation's problems," said Khamenei.

In a separate meeting with Maliki, Iran's hardline President Mahmoud Ahmadinejad expressed hope that "with the formation of an Iraqi government the period of hardship for the Iraqi people would end," the official IRNA news agency reported.

"Iran fully supports a united, strong and independent Iraq which would be at the service of the Iraqi people ... and the region's progress," Ahmadinejad added, according to IRNA. – Reuters