BAGHDAD, March 13, 2005 (Reuters) - Iraq's leading parties have failed to reach a deal on forming a new government before the first meeting of parliament, crushing hopes a much-needed cabinet would start to tackle relentless violence.

Iraq's Deputy President Rowsch Shways said talks between the Shi'ite alliance that won landmark elections and Kurds who came second would resume after parliament's opening session on Wednesday to hammer out differences.

"We will return to Baghdad to rewrite some points. The talks will continue and there are some important points that deserve more discussion," Fouad Massoum, interim parliamentary speaker and a Kurd, said in the northern city of Arbil.

Parliament is due to meet on Wednesday, more than six weeks after polls that gave many in Iraq hope that a new authority would clamp down on suicide attacks, car bombs and execution-style killings by mainly Sunni Arab insurgents.

Four bodies, three Iraqi soldiers and one policeman, were found on a farm in Latafiya, 70 km (40 miles) south of the capital. An army officer said they had been shot in the head and chest two days ago. Their hands had been tied.

Many Iraqis blame politicians, for whom they say they risked their lives to vote in the January 30 election, for prolonging a political vacuum while violence spirals.

Officials said earlier that the two sides had yet to agree on how to distribute top government posts and on extending the Kurds' autonomous region in the north.

Ahmad Chalabi, a top member of the Shi'ite bloc, the United Iraqi Alliance, returned empty-handed on Saturday from a trip to Iraqi Kurdistan to save the proposed Kurdish-Shi'ite alliance which has the two-thirds majority needed to form the government.

"The meetings have collapsed. There was no deal," an aide to Chalabi told Reuters.

KURDS DEFIANT

Kurdish politicians were defiant, rebuffing the Shi'ite alliance's attempts to blame them for the deadlock.

"They want to lay the responsibility for the political equation solely on the Kurdish side," Deputy Prime Minister Barham Salih, a Kurd, told Al Arabiya television.

"We are willing to sacrifice the presidency to the Shi'ites if the Shi'ites sacrifice the premiership to a Sunni," Salih said in a comment laced with irony as the Shi'ite bloc insists that as election winner it should nominate the prime minister.

The Kurds, who number about 3 million out of Iraq's 27 million people, want the presidency for Kurdish leader Jalal Talabani, and a top ministry -- interior, finance or defence.

They also want their share of oil revenue to rise to 25 percent from 17 percent now, and inclusion of Kirkuk in the Kurdistan federal region.

The stand-off plays into the hands of interim Prime Minister Iyad Allawi, whose cabinet could now remain in a caretaker role until a general election due at the end of the year.

Sunni Arabs, dominant under Saddam, largely boycotted the election and have little representation in the new assembly.

Mainly Sunni insurgents have staged ever bolder attacks on Shi'ite and official targets in their campaign to topple the U.S.-backed government and stall efforts to form a new cabinet.

In the deadliest recent attack, a suicide bomber struck a Shi'ite mosque during a funeral on Thursday, killing at least 50 people and wounding dozens more. A little-known Sunni Muslim group claimed responsibility for the attack on the Internet.

The group, Jamaat Jund al-Sahaba (Soldiers of the Prophet's Companions), vowed to carry out attacks against Shi'ites it described as "rejectionists" who are not real Muslims.

The authenticity of the statement could not be verified.

On Saturday, a suicide car bomb at a checkpoint in Sharqat south of Mosul killed six Iraqi soldiers. Regional army commander Lieutenant-Colonel Talal Mohammed said on Sunday the army had arrested a Yemeni in connection with the attack.

In Mosul, a U.S. soldier was killed by small arms fire on Friday, the American military said, and on Saturday a roadside bomb killed two U.S. contractors south of Baghdad.

The Association of Muslim Clerics, a leading Sunni group, complained on Sunday that U.S. troops had searched the home of its leader for the second time in a week.

The counter-insurgency tactics used by U.S.-led forces have sparked anger in Iraq and caused strains with some key allies.

Bulgaria said on Saturday U.S. forces had admitted they broke their rules of engagement when a unit fired on a Bulgarian patrol on March 4, killing a soldier.

A U.S. military spokesman in Baghdad said he could not comment until the investigation is complete.