Iraq's courts should decide the charges against a vice president accused of running death squads, Iraq's Kurdish president and the Sunni speaker of parliament said on Tuesday in a bid to defuse the country's worst political crisis in a year.

President Jalal Talabani and speaker Osama al-Nujaifi also agreed to organise a national conference for all political blocs to ease tensions that have raised fears of a return to sectarian conflict after the last U.S. troops left nine days ago.

The turmoil erupted when Shi'ite Prime Minister Nuri al-Maliki moved against two Sunni leaders from the Iraqiya party.

Maliki has sought the arrest of Vice President Tareq al-Hashemi on charges he ran death squads targeting government and security officials, and has also asked parliament to fire his deputy, Saleh al-Mutlaq, after he likened Maliki to the late Iraqi dictator Saddam Hussein.

The crisis has threatened to unravel a fragile power-sharing agreement between the Shi'ite National Alliance, a bloc representing Kurds and the mainly Sunni-backed Iraqiya, who have been boycotting parliament and vowed to try unseat Maliki.

Talabani and Nujaifi agreed to resolve the case of vice president Tareq al-Hashemi through judicial procedures which are provided by the law, which guarantees finding the facts in the proper way, said a statement on the presidential website.

Hashemi has said he is the victim of a political vendetta. Shi'ite political leaders have called the allegations against him a criminal case and denied it was politically motivated, as some Sunnis have suggested.

Iraqiya leader Iyad Allawi said in an interview broadcast on Arabiya television on Tuesday that the government had changed its own story on how the Hashemi investigation was conducted.

This is not acceptable or permissible and this is proof that there is manipulation, Allawi said.

Allawi's Iraqiya bloc said early elections were a potential solution to the crisis. The political movement of anti-American Shi'ite cleric Moqtada al-Sadr, a key Maliki ally, called for new elections on Monday.

SUNNI MINISTERS BOYCOTT

On Tuesday, two out of eight ministers belonging to Iraqiya boycotted the weekly cabinet meeting. Four other Iraqiya ministers were excused but two attended the meeting, sources said, indicating a clear rift in the bloc.

(Some of) Iraqiya bloc's ministers are on medical leave or participating in official delegations outside Iraq, a senior cabinet official, who declined to be named, told Reuters.

Just the finance and science and technology ministers did not attend the cabinet meeting for the second week.

Ahmed al-Alwani, a senior Sunni Iraqiya lawmaker, said the bloc was still committed to its boycott of cabinet meetings.

Iraqi and U.S. officials have been in a flurry of talks to calm the crisis, which threatens to push Iraq into the kind of sectarian strife that took the OPEC oil producer to the edge of civil war only a few years ago.

Multiple bombings targeting mainly Shi'ite areas in Baghdad killed at least 72 people on Thursday and a suicide car bomber targeting the interior ministry killed seven people on Monday.

Masoud Barzani, president of semi-autonomous Iraqi Kurdistan, has started a series of talks in Baghdad to get the parties together for a meeting.

If the meeting is not held or if the meeting fails, then we have to go for early elections and God forbid if we have a conflict or sectarian war, we will not be party to it, he told Al Jazeera television in an interview.

Lawmakers said the blocs were trying to resolve the crisis and had agreed that Hashemi's case should be handled in court.

There are positive signs coming from both sides, who agreed for calm and continuing discussions and consultations, said Adil Barwari, a senior member of the Barzani's Kurdish Democratic Party.

All blocs agreed that Tareq al-Hashemi has to appear before the judiciary in Baghdad or Arbil and that Mutlaq has to deliver a public apology (to Maliki) or the Iraqiya bloc will nominate someone to replace him.

There was no immediate indication that Shi'ite blocs would attend a national conference organised by Talabani and Nujaifi. But Qassim al-Araji, a senior lawmaker of the National Alliance, said the bloc was committed to the power-sharing agreement.

The National Alliance adheres to a real national partnership and does not want to marginalise any side or any component of the Iraqi people, he said.

(Additional reporting by Ahmed Rasheed; Editing by Serena Chaudhry)