Feb. 14 (Bloomberg) -- Iraq may be run by a secular leader such as interim Prime Minister Ayad Allawi or Finance Minister Adel Abdel Mahdi after a Shiite Muslim coalition failed to win a majority in the National Assembly election.

The United Iraqi Alliance, backed by Grand Ayatollah Ali al- Sistani and known as the Shia List, received 47.6 percent of the votes in the Jan. 30 election, the Independent Electoral Commission said yesterday. A two-thirds majority is required to form a government. The Kurdish Alliance came second with 25.4 percent. Allawi's Iraqi List came third with 13.6 percent.

``Forty-eight percent is a victory but not an overwhelming one,'' Henner Fuertig, of the Hamburg-based German Institute for Middle East Studies, said in a telephone interview. ``I don't think we've seen the end of Allawi yet.''

Iraq's first free election in more than 50 years may confirm the position of Allawi, a U.S.-backed Shiite who describes himself as secular, as a compromise to unite religious and ethnic groups, according to analysts including Josh Mandel, head of the Middle East unit at London-based Control Risks Group. Mahdi may also be able to win support from diverse groups and has the advantage of being a moderate member of the Shia list, Fuertig said.

``Iraq is bleeding and we need everybody at this juncture to work for solidarity and unity,'' Mahdi told al-Arabiya television, according to Agence France-Presse.

Official Confirmation

The results will be officially confirmed Feb. 16 if they aren't contested, the Electoral Commission said. The assembly will approve a prime minister by early March.

U.S. Senator Bill Frist, who visited Iraq Jan. 10, said yesterday the fact that the Shiite coalition won less than 50 percent ``leaves open the possibility that minority coalitions can come together'' to form a government. Frist, the leader of the Senate's Republican majority, was speaking on the ``Fox News Sunday'' program.

There is a tacit agreement that the prime minister will be a Shiite, the president a Kurd and one of two vice presidents a Sunni, according to Yahia Said of the London School of Economics and Nadim Shehadi of the London-based Chatham House. Kurds and Sunnis won't accept a clerical Shiite, ensuring that Sharia, or Islamic Law, isn't enshrined in the constitution as the primary source of law, they said.

``The Kurds should be given one or two prominent external positions, like president or vice president,'' Ali Allawi, a former defense minister in the Iraqi Governing Council and a member of the Shia List, said in a Feb. 4 interview. They ``have every right to expect key positions of state.''

Allawi's Challengers

Allawi's strongest challengers for prime minister are Finance Minister Mahdi and nuclear physicist Hussain Shahristani, both considered to be moderate members of the Shia List by analysts including Robert Blackwill, a former Iraq strategist in the Bush administration and head of global affairs at Washington- based Barbour Griffith & Rogers, a lobbying firm.

``The interim finance minister is a strong contender for the post of prime minister,'' Said, of the London School of Economics, said in a telephone interview yesterday. ``He is perceived largely as a moderate secular figure that people could agree on.''

Of Iraq's 14.2 million registered voters, 8.55 million cast ballots for a 275-seat Transitional National Assembly that will draft a permanent constitution, prepare for general elections at year's end, and elect a presidential cabinet to select the prime minister in the next two weeks. Smaller parties accounted for the balance of votes cast.

Nation State

This is the first time since Iraq became a nation state in 1932 that the Shiite majority and the Kurdish minority have risen to such prominence in the government.

The Kurds are in a strong position, said Fuertig of the German Institute, adding that they hold the key to the outcome of the deal-making that will intensify in the next few weeks.

The Sunni Muslim-dominated Baathist regime of Saddam Hussein ruled Iraq for more than three decades before the March 2003 invasion by U.S.-led forces that toppled the dictator. The regime suppressed the Shiites and killed as many as 70,000 Kurds.

Sunnis have dominated the insurgency in Iraq that followed the invasion. Supporters of Hussein who lost their status joined forces with followers of al-Qaeda-linked terrorists to try to foment religious divisions, according to the current Iraqi government, the U.S. military and analysts.

Role for Sunnis

``The right-thinking Sunnis have to take back their inheritance,'' Ali Allawi said.

Kurds, who are chiefly secular and suspicious of the two main parties in the United Iraqi Alliance, the Supreme Council for the Islamic Revolution in Iraq and the Dawa party, will be a counterweight to religious groups participating in the new government, said analysts including Nadim Shehadi of Chatham House.

Sunni political groups that shunned the election will be invited to participate in the new government and in drafting the constitution, according to Iraqi politicians including Allawi and Adnan Pachachi, a former Iraqi ambassador to the United Nations.

Sunnis and Kurds each make up 15 percent to 20 percent of the population. Shiites account for about 60 percent.

A total of 7,785 men and women ran in the election, representing 111 political entities, including parties and coalition and individual candidates.

The United Iraqi Alliance will put forward four candidates for the job of prime minister, Ali Allawi said: Mahdi, the interim finance minister; Dawa Party leader Ibrahim al-Jaafari; Ahmed Chalabi, once the candidate favored by the U.S.; and Shahristani, the physicist.

To contact the reporter on this story: Caroline Alexander in London at calexander1@bloomberg.net

Last Updated: February 14, 2005 05:11 EST