Prime Minister Nuri al-Maliki had a modest lead over rival Shi'ites, partial results from Iraq's tight election race showed on Friday, but a secularist challenger remained far ahead among Iraqi Sunnis.

The race may remain too close to call until initial results are posted for all of Iraq's 18 provinces, including pivotal areas like Baghdad, the ethnically and religiously diverse capital city that is home to at least 6 million people.

Initial results for five provinces have been released so far, showing Maliki's State of Law coalition ahead of the Iraqi National Alliance (INA), a coalition of powerful Shi'ite parties -- but only by about 16 percent.

The picture following Iraq's March 7 parliamentary poll, a milestone seven years after Saddam Hussein's ouster, was further muddled by another delay by Iraqi electoral officials in giving complete initial results and by growing accusations of fraud.

Complaints of serious fraud mark an inauspicious start to what will likely be long, fractious talks to form Iraq's next government. Violence may have receded, but it lurks under the surface in a country where sectarian wounds have not healed and major questions about land and oil remain unsettled.

Former Prime Minister Iyad Allawi's Iraqiya list, a cross-sectarian, secularist alliance, was well ahead in two northern provinces home to large numbers of minority Sunnis.

Officials at the Independent High Electoral Commission (IHEC) said more results would likely be released on Friday.

Hamdiya al-Husseini, a top IHEC official, dismissed charges of serious fraud coming from Allawi's camp, including reports that ballots were discovered in the garbage and more than 200,000 soldiers' names were missing from voting rosters.

The process of counting and sorting ballots is going well, with the presence of observers from political parties and under international supervision, Husseini said.

United Nations officials, who are advising IHEC, downplayed the reports of fraud.

SLOW GOING

The coming period is crucial for the Obama administration, facing an escalating war in Afghanistan, as it plans to halve its troop force by September 1 and withdraw fully by end-2011.

Leading world energy firms will be watching closely to see what sort of government emerges to take over the multi-billion-dollar oil contracts they have signed with Iraq.

There are also worrying precedents: After Iraq's last parliamentary election in late 2005, sectarian violence exploded as politicians took months to settle on a government.

Even if Maliki beats out Shi'ite rivals, he will likely need to ally with one or two other blocs to form the next government.

Yet he may face opposition to another term from coalition partners who resent his transformation into a forceful leader who has built up power as premier and taken on Shi'ite militias.

The gulf between Maliki and Allawi, a secular Shi'ite who governed Iraq from 2004-05, widened ahead of the polls as Allawi criticized the ban of hundreds of candidates, including leading Sunni Arabs from Iraqiya, from the elections over suspected ties to Saddam's Baath party. Maliki supported the ban.

U.N. officials acknowledged the counting was taking longer than expected, but defended IHEC officials who they said were grappling with a complicated system set up to thwart fraud.

But confusion has reigned at tally centers, and even IHEC commissioners have seemed unsure of the process.

Adding to that are technical challenges. The IHEC computer system used to enter polling data had slowed or been taken offline intermittently for maintenance, U.N. officials said.

It is fixed now, said Usama al-Ani, an IHEC commissioner. God willing, if there are no more technical problems, we can post initial results from at least another three provinces today. (Additional reporting by Muhanad Mohamed and Waleed Ibrahim; Writing by Missy Ryan; Editing by Samia Nakhoul)

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