BAGHDAD, Aug 7 (AFP) - 4h14 - Iraq's leaders will attempt to break the deadlock on a new draft constitution in a national conference here Sunday amid signs that Iraq's Kurds are unwilling to compromise on their demands for autonomy.Iraqi Kurds have rejected suggestions the country should be proclaimed an Islamic state in the new constitution and refused to compromise on the incorporation of oil-rich Kirkuk into their autonomous northern region.

Massoud Barzani, the president of Iraq's autonomous Kurdistan, assured Kurdish MPs that he would insist on federalism and retaining the Kurdish peshmerga militia when he meets Iraqi leaders to discuss the constitution Sunday in Baghdad.

"We will not accept that Iraq's identity is Islamic," Barzani told the autonomous Kurdistan parliament in Arbil on Saturday.

He also rejected suggestions that Iraq be termed an Arab nation.

"Let Arab Iraq be part of the Arab nation -- we are not," the Kurdish leader said.

Barzani arrived in Baghdad late Saturday to participate in the national conference Sunday.

"This is a golden chance for Kurds and Kurdistan -- if we don't do what is important for Kurdistan, there will be no second chance. We will not make our final decision in Baghdad, the Kurdish parliament will decide," he said.

Iraqi Kurds, who number about 4.5 million, want a constitution that will guarantee federalism and preserve their region's autonomy.

Barzani also insisted his region would retain the peshmerga, despite calls by Baghdad that they be incorporated in the national army.

The emergency meeting of the Kurdish parliament had prompted a two-day postponement of the national conference to break the constitutional deadlock.

The deadlock revolves around federalism, the official languages of the new Iraq, the relation between religion and state, the rights of women and the future of Kirkuk.

"There are many things which need more discussion and dialogue," said the regional parliament's speaker, Adnan Mufti, a senior official in the Patriotic Union of Kurdistan, the political party of Iraqi President Jalal Talabani.

Mufti said the Kurds would be ready to endorse the charter "if everyone thinks like us -- that the new constitution should be for all Iraqis."

One potential stumbling block could be the future status of oil-rich Kirkuk, which Kurds want incorporated into their territory.

During the 1980s, Saddam Hussein pursued a policy of "Arabisation" in Kirkuk, driving out thousands of Kurds and replacing them with Arabs to consolidate his hold over the city.

Kurds are determined to make good on proposals laid out in the country's interim law, signed in March 2004, that this policy be reversed and Kurds returned to the city.

"We believe the new constitution must uphold (the interim agreements made over Kirkuk) and nothing less -- we want normalisation," Mufti said.

The national conference is due to report back by August 12, and Iraqi leaders have insisted they are on track to complete a final draft for debate by parliament by August 15 ahead of a referendum in mid-October.

The referendum will be followed by nationwide elections in December.

Meanwhile, about 1,000 US marines and Iraqi soldiers combed the areas of Haditha, Haqliniyah and Barwanah in western Iraq, where 40 US soldiers were killed by Iraqi rebels in the past fortnight.

The US military said Saturday that it had thwarted car bombings in the region after finding three vehicles packed with explosives following a tip-off by a local inhabitant. It said the security forces blew up the cars.

The US military also said Saturday they had discovered rebel correspondence indicating the insurgency's organization was weakening in the northern town of Mosul.

A letter allegedly written by an insurgent to the Al-Qaeda leader in Iraq, Abu Musab al-Zarqawi, complains of inefficient attacks and falling leadership quality among Mosul's rebels, the US military said.

"Those who are in the network are disobedient and a legitimate organisation does not exist in Mosul. It is not secret to you (Zarqawi) the noticeable decrease in the attacks carried out by the mujahedeen, from not long ago when Mosul was in the hands of mujahedeen," the letter read, according to the US military.

The letter was found by the US forces during a raid in Mosul on July 27, they said.

In other violence Saturday, a British soldier was injured in an attack in the southern city of Basra, London said.

Eight Iraqis were killed and 30 wounded in attacks in Baghdad and the Sunni heartland to the north of the capital.

Also, the US military said one soldier died on Thursday in Mosul.