BAGHDAD - Iraq's fractious parliament on Monday approved an amended version of a law needed to hold a general election next year, but sidestepped a veto by Sunni Arab Vice-President Tareq al-Hashemi, lawmakers said.

The law will return to the presidential council, where lawmakers close to Hashemi said he might veto it again -- potentially delaying by a month the election due in January and threatening U.S. plans for a troop drawdown next year.

This has widened the problem and we are heading into a dark tunnel. This means a delay in the election by at least one month, said Alaa Maki of the Sunni Arab Accordance Front.

Maki said he believed the vice-president would again reject the law.

The amended election law includes new clauses that give Iraqis inside and outside the country equal status as voters and say the votes of refugees and exiles would be counted in their home provinces.

It also stipulates that the voter rolls will be based on food ration data from 2005, when the last election was held, increased by 2.8 percent per year since then to match estimated population growth.

But it did not increase the number of seats allocated to minorities, internally displaced and refugees to 15 percent of the total, as Hashemi had demanded when he cast his veto.

Sunni Arab parliamentarians said they opposed the use of data from 2005 because it would reduce their representation in parliament and their clout against majority Shi'ite Muslims and their ethnic Kurd allies.

This is arm-twisting. It does not solve the issue, Maki said.

The next election is viewed as pivotal for Iraq as it emerges from the sectarian slaughter unleashed by the 2003 U.S.-led invasion and starts to stand on its own feet ahead of a full U.S. withdrawal by the end of 2011.

A substantial delay in the election date could affect U.S. plans to end combat operations on August 31, 2010. U.S. commanders want to retain a sizeable presence in Iraq until the next government is seated and the security situation becomes clear.

U.S. plans to beef up NATO forces in Afghanistan partially hinge on the military's ability to draw down in Iraq.

(Reporting by Waleed Ibrahim, writing by Michael Christie: Editing by Janet Lawrence)

Iraq