BAGHDAD - Iraqi officials confirmed on Saturday that appeals by prominent Sunni politicians against a move to ban them from next month's election had failed, opening the door to sectarian recriminations that could mar the vote.

Many Iraqi Sunnis are alarmed by a campaign by the Shi'ite-led government against people accused of links to former Sunni dictator Saddam Hussein's Baath party, and a decision by a panel to ban almost 500 candidates because of Baathist links.

The controversy has threatened to reopen old wounds just when the sectarian slaughter triggered by the 2003 U.S. invasion has begun to fade and Iraq has started to attract multibillion-dollar investments from global oil firms.

Usama al-Ani, deputy head of the independent electoral commission, or IHEC, said the agency had received a formal notification from an appeals panel that only 26 appeals by banned candidates had been successful.

One hundred and forty-five appeals were rejected, he said. Other candidates had been voluntarily replaced by their parties.

Among those whose appeals were rejected were Saleh al-Mutlaq and Dhafer al-Ani, said Ani, referring to two Sunni politicians who are among the most prominent Sunnis in Iraq.

The furore over the banned candidates has come to dominate the campaign for the March 7 parliamentary election, which kicked off officially on Friday.

The election will determine who runs Iraq as U.S. troops prepare to withdraw by the end of 2011 and massive oil sector projects kick into gear. If broadly accepted, the vote could help to heal the rift between Sunni and Shi'ite; if it is viewed as unfair by Sunnis, it could lead to more bloodshed and strife.

The panel that drew up the list of banned candidates is dominated by Shi'ite politicians and its actions were viewed by some Sunnis as an attempt to disenfranchise them.
The list actually includes more Shi'ites than Sunnis, and disproportionately targets cross-confessional, secular alliances that are expected to fare well against the religious Shi'ite Islamist parties that have dominated Iraq since the invasion.

BAATH PARANOIA

Prime Minister Nuri al-Maliki and other Shi'ite leaders have jumped on the issue to stir up widespread fears among Shi'ite voters over a possible return to power of the Baath party, which brutally repressed Shi'ites and minority Kurds under Saddam.

The tactic could distract from complaints about corruption, poor services and bomb attacks, and deter Shi'ite voters from backing secular contenders, like the Iraqiya list of former prime minister Iyad Allawi that both Mutlaq and Ani belong to.

It is not a judicial decree, it is a political one for clear political effect, and it has a clear Iranian flavour, Ani told Reuters, echoing perceptions that the Shi'ite politicians who drew up the list of banned candidates are close to Tehran.

The Iraqiya coalition announced it would temporarily suspend its election campaign to protest the ban, as well as the murder of one its candidates in the tense city of Mosul a few days ago.

Mutlaq, who had been openly and controversially courting the votes of Iraqis nostalgic for the greater stability and security of Saddam's rule, warned of disaster.

If the current political process continues along this path it will fail and finish soon, Mutlaq told Reuters at a protest called on Saturday by his supporters.

In an interview with Reuters on Friday, Mutlaq said that enemies of Iraq had won a battle against him but not the war.
I believe that democracy in Iraq is committing suicide, he said.

(Additional reporting by Waleed Ibrahim and Ahmed Rasheed; Writing by Michael Christie; Editing by Alison Williams)