BAGHDAD - Iraqi Vice-President Tareq al-Hashemi said on Thursday he had postponed until Sunday a decision on whether to sign or veto an election law required for next year's critical poll, after a court gave him more time.

Hashemi, a Sunni Arab, is expected to veto the law for a second time due to a dispute with Shi'ite and Kurdish lawmakers over the allocation of parliamentary seats among Iraq's ethnic and religious groups.

I am still looking for a political accord among all parties which allows us to move beyond this impasse, Hashemi told a news conference. A veto is a last resort.

The election, initially scheduled for January, is seen as a critical step in Iraq's nascent democracy as the sectarian violence that killed at least 100,000 people subsides and as U.S. forces prepare to slash troop levels.

Hashemi, one of three members of a presidency council, vetoed an original election bill because it did not give enough seats to Iraqis who fled abroad, many of them Sunnis.

Rather than address his concerns, Iraq's majority Shi'ites and minority Kurds joined forces to pass an amended law that cut the number of parliamentary seats in predominantly Sunni areas.

Hashemi had 10 days from November 23 when parliament approved the amended law to veto it.

The High Judicial Council ruled that the deadline would be extended to Sunday, because the 10-day period would legally end on Friday, the Muslim holy day, and a decision could await the subsequent working day, court spokesman Abdul-Sattar Birqdar said. In Iraq, the weekend is Friday and Saturday.

The reasons why I vetoed the law still exist, Hashemi said. I consider these reasons to be principles that I will not relinquish because they concern all Iraqi citizens.

The poll is unlikely to happen before the end of February or beginning of March, potentially creating a political vacuum as the mandate of Prime Minister Nuri al-Maliki's government expires on March 16.

A more substantial delay could affect U.S. plans to end combat operations in Iraq in August.

(Additional reporting by Aseel Kami, writing by Ayla Jean Yackley, editing by Robin Pomeroy)