Iraq's Shi'ite alliance turned down a Saudi Arabian offer on Saturday to host all-party talks to resolve months of political stalemate because it said it was confident a deal could be struck in Baghdad on a new government.   

Iraq has been without a new government since a March 7 election that failed to produce a clear winner, leaving Shi'ite Muslim, Sunni Arab and Kurdish politicians jockeying for power and position.

Saudi Arabia's King Abdullah had invited Iraq's parties to talks in Riyadh under the auspices of the 22-nation Arab League after the annual Muslim haj pilgrimage ending around November 18, the Saudi state news agency SPA reported on Saturday.   

Iraqiya, the cross-sectarian Sunni-backed political bloc that received the most votes in the election but failed to win an outright majority in parliament, welcomed the Saudi initiative and said Turkey and Iran should also be invited.   

The National Alliance, a merger of Iraq's Shi'ite-led blocs, including that of incumbent Prime Minister Nuri Al-Maliki's coalition, said a deal in Baghdad was close after the highest court ordered parliament to resume sessions last week.

"We are confident the representatives of the Iraqi people are able... to reach a deal to form a national partnership government," said legislator Hassan Al-Sunaid, reading from a statement that he said came from the Shi'ite National Alliance.

"Though we express our appreciation to Saudi Arabia for its concern about the situation in Iraq and its willingness to provide support, we would like to confirm Iraqi leaders are continuing ... their meetings to reach a national consensus."    

Sunaid, a senior member of Maliki's bloc, said the statement was supported by the Kurdish Alliance, which has 57 seats in parliament and is being wooed by Maliki's camp to form a coalition government.   

The Kurdish bloc was not immediately available for comment.   

The sectarian strife triggered after the 2003 US-led invasion has receded but the lack of a government has sparked concerns among Iraq's neighbours of a rise in violence as US forces withdraw.   

"Everyone believes that you are at a crossroad that requires doing the utmost efforts to unite, get over traumas and conflicts, and get rid of sectarianism," SPA quoted King Abdullah as saying in comments addressed to Iraqi leaders.   

The National Alliance named Maliki as its nominee for a second term on Oct. 1 despite dissent within the coalition. Maliki won support mainly from his own State of Law bloc and the Sadrist movement of anti-American cleric Moqtada al-Sadr. - Reuters