Iraqi President Jalal Talabani said he did not expect a new government to be formed today despite earlier hopes this would be possible but said talks were continuing.
"I think the government will not be announced today," Mr Talabani said in a television interview.
"We want to see the Sunni Arabs represented as well. Negotiations also continue over the allocation of some positions. We want all in the country to be represented, even those not represented in the parliament, the Turkmens and Christians."
Mr Talabani, an ex-Kurdish rebel leader, said yesterday he hoped the new cabinet could be announced today, nearly three months after the elections, with the various factions - Shia Muslims, Kurds and Sunnis - nearing consensus.
But disputes surfaced again at meetings last night, with caretaker Prime Minister Iyad Allawi, who narrowly escaped assassination shortly after the talks, rejecting an offer to join the government, sources said.
The constant delays in forming a government have not only heightened tensions between the majority Shias and the formerly dominant Sunnis but also appear to have provided fuel to an insurgency gripping the country for the past two years.
"The Iraqi public has started to hate them [the insurgents] because they killed many innocent people at mosques and churches," said Mr Talabani, adding that a restructuring of the Iraqi security forces would help crush the rebels in time.
Asked when US occupying forces might pull out of Iraq, Mr Talabani said: "As far as I understand, they want to leave the country in the shortest possible time. They don't want to stay long. They'll leave when we establish our own security."