UN representative Ashraf Qazi said that the fierce fighting in the capital underscored the urgent need to form a new government, which has been held up for four months by power struggles between the main Shia, Sunni Arab and Kurdish parties.
Qazi, who has until now kept a low profile in Iraqi politics, was in the southern holy city of Najaf to hold talks with top Shia clerics, including Grand Ayatollah Ali Al Sistani.
Baghdad's Sunni Arab stronghold of Adhamiyah was smoldering after two days of gun battles between insurgents and US and Iraqi forces that left five rebels dead and seven captured.
Fears that Iraq was edging closer to civil war three years on from the US-led invasion have mounted after a wave of sectarian violence that has killed hundreds of people since February, adding to the instability in a country already embroiled in a deadly insurgency against the occupation.
The killings have surged as Iraq struggles to form a governing coalition because of disputes over power-sharing among the dominant Shias and the Sunni Arab and Kurdish minorities.
Qazi began his bridge-building mission by meeting Grand Ayatollah Mohammed Said Al Hakim in Najaf and was later scheduled to meet Sistani.
On Tuesday he called for the rapid formation of the country's first permanent post-Saddam Hussein government, meant to be the final stage in Iraq's political transition since the March 2003 US-led invasion.
"The protracted negotiations between the political parties required a resolution at the earliest opportunity," Qazi said in a statement. "The incident again underscored the importance of forming a government of national unity as quickly as possible," he said, referring to the fighting in Adhamiyah.
US Ambassador to Iraq Zalmay Khalilzad also said that a new government was needed to reign in violence.
"We are trying to urge the politicians to quickly hold the parliament session," Khalilzad told a local television.
Iraqi legislators said that they were continuing negotiations after a planned session of parliament on Monday was canceled because of the impasse.
"We hope to solve the problems to end the deadlock as soon as possible... we need time but how much I do not know. The delay is not acceptable," said Mahmoud Othman, a Kurdish lawmaker.
Fresh violence rocked the capital on Wednesday as rebels continued to exploit the political vacuum.
A roadside bomb near the office of former Iraqi premier Ayad Allawi's party office killed one person and injured 10 while a former Iraqi army colonel was shot dead by gunmen in southern Baghdad.
Police also found five bullet-riddled bodies near a water purification plant in the Rustumiyah suburb just outside Baghdad.
Late on Tuesday Iraqi troops were still under sporadic gunfire from insurgents in Adhamiyah where the army had conducted search operations after a seven-hour firefight with around 50 gunmen. Five rebels were killed and seven captured but dozens of militants appeared to have escaped.
Meanwhile a survey by a group of nongovernmental organizations said that nearly 20,000 people have been kidnapped, including women and children, in Iraq since the beginning of the year alone.
The survey, which underscores the massive social upheaval caused by rebel activity and increasing sectarian conflict, does not give the number of people killed. However, it says that 15,462 people have been wounded.
The high-profile seizure of foreigners in Iraq has numbered a few hundred since the practice began two years ago and is usually aimed at scoring propaganda points against the US-led occupation.
In contrast, the thousands of Iraqis being kidnapped are primarily the victims of political rivals and of common criminals seeking ransom.
© 2006 Agence France-Presse