The State of Law alliance led by Iraqi incumbent Prime Minister Nuri al-Maliki and the Iraqi National Alliance (INA) have formed a coalition, according to a statement released on late Tuesday.

"The two alliances reached an agreement to form a parliamentary bloc," said INA official Abdul-Razzak al-Kazimi at a press conference in Baghdad, adding "the alliance was a major step and would open to other Iraqi national forces."

The new alliance was "determined to provide all the requirements for the success of the political process and to build an effective parliamentary system," said the official while reading the statement.

According to initial results, the State of Law won 89 seats and the Iraqi National Alliance got 70 in the recent parliamentary elections. After combined, the two have 159 seats, very close to the needed 163 seats to form the new government.

Al-Kazimi said the newly formed alliance vowed to name a prime minister committed to this program and pledged to promote an "institutional building of the state and the effective and constructive role of Iraq at the Arab, Islamic and international levels," the official said.

The new coalition will strive for the formation of an Iraqi government in accordance with national standards and efficiency, while being committed to the constitution and a government program to ensure the advancement of Iraq realities at all levels, according to the statement.

The formation of the new alliance may deal a heavy blow to former interim Prime Minister Ayad Allawi, whose cross-sectarian Iraqia List bloc won 91 seats in the elections, the largest single bloc in the parliament.

Analysts worry the new political development may well make Iraq's minority Sunnis feel alienated again in the political arena as they have pinned much hope on Allawi's bloc.

Meanwhile, a number of election-related disputes remain unresolved. Iraq's independent electoral authorities started a re- count of some 2.5 million votes in Baghdad Province on Monday. But the move immediately drew complaint from Maliki's bloc about the procedures.

Court decisions on the alleged disqualifications of some seat- winning members have yet to be made.