By KIRK SEMPLE and RICHARD A. OPPEL Jr. - Published: April 21, 2006

BAGHDAD, Iraq, April 20 - Under intense domestic and American pressure, Prime Minister Ibrahim al-Jaafari dropped his bid to retain his job on Thursday, removing a major obstacle to forming a new government during a time of rising sectarian violence.

Leaders from each of Iraq's main factions-  Sunni Arab, Shiite and Kurd -  called the decision a breakthrough.

"I believe that we will succeed in forming the national unity government the people are waiting for," Adnan Pachachi, the acting speaker of Parliament, said at a news conference at the Convention Center inside the fortified Green Zone.

But while Mr. Jaafari's capitulation after two months of resistance could indeed resolve the stalemate, daunting political challenges lie ahead. Leaders are battling over high-level posts, and a new government will need to revive a moribund civil sector and inspire confidence in public leadership.

Moreover, the likely candidates to replace Mr. Jaafari lack political stature, raising questions about whether they will be any more effective than he in leading a struggling government at a time of widening violence.

Shiite politicians have in recent days mentioned two possible replacements: Jawad al-Maliki, an outspoken and highly visible member of Parliament, and Ali al-Adeeb, a longtime party official and aide to Mr. Jaafari.

Mr. Jaafari won the nomination in February by a single vote in a ballot among Shiite political leaders, in part because of support from Moktada al-Sadr, the anti-American cleric who controls the largest bloc of seats in the main alliance. But his nomination brought a groundswell of opposition among Sunni Arab, Kurdish, secular and even some Shiite politicians, who said he had failed to improve services or stem the violence.

Leaders of the Shiite bloc, the United Iraqi Alliance, met throughout the day to deliberate on new nominees; as the largest bloc in Parliament, the alliance has the constitutional right to name the prime minister. Members said a meeting of the full membership-  130 representatives - was set for Saturday morning, and a meeting of the 275-member Parliament was scheduled for later that day.

President Jalal Talabani, a Kurd, suggested at the news conference that the opposition blocs would not oppose the Shiites' next nominee.

"The alliance is free to choose its candidate, and we respect the alliance and its will," he said. "Whoever will be the candidate of the alliance, we will approve it."

It remained unclear why Mr. Jaafari gave in on Thursday, especially after having vowed on Wednesday that he would not give up his nomination. But outside pressure doubtless played a role.

Ashraf Qazi, the United Nations envoy in Iraq, met Wednesday with Grand Ayatollah Ali al-Sistani, the most influential Shiite cleric, to press the need for Shiite politicians to resolve the impasse.

The Shiites have also been pushed by the American government to settle the dispute, and Secretary of State Condoleezza Rice intervened during her visit this month. American officials have lobbied the Shiites to replace Mr. Jaafari because of his close ties to Mr. Sadr, who commands the loyalty of a vast and unpredictable militia, and his relationship with Iran, where he lived for many years in exile.

Although Mr. Jaafari did not formally withdraw, he made it clear that he was ending his resistance to stepping aside. In the letter to the Shiite alliance, which was read at a news conference by an official from Mr. Jaafari's Islamic Dawa Party, he said he was leaving the nomination completely to the Shiite bloc.

The alliance could reassert his nomination, but leaders across the political spectrum said that was very unlikely.

In a late-night televised address to the nation, Mr. Jaafari said he did not want to impede the progress of the alliance. "I cannot accept being a barricade or looking like a barricade," he said.

Some officials speculated that the Shiites might have yielded under the threat that Sunni Arab, Kurdish and independent blocs would form a larger coalition to commandeer the right to pick a prime minister.

But despite their shared distaste for Mr. Jaafari, the Kurds and Sunni Arabs have major divisions that would make any such alliance extraordinarily difficult. The Kurds, for instance, insist on seizing Kirkuk and displacing Arabs, mostly Sunnis, who were settled there under Saddam Hussein.

Mahmoud Othman, a member of Parliament and senior official in the Kurdish political alliance, said it appeared that the leading Shiite clerics in Najaf, particularly Ayatollah Sistani, had forced Mr. Jaafari's hand.

"Jaafari resisted as long as he could, but he reached the point where he couldn't resist any more because of the pressure he had from Najaf," Mr. Othman said.

Shiite leaders met Thursday to deliberate, and said they planned to continue talks on Friday.

The most likely possibility is that the bloc will choose another candidate from Mr. Jaafari's Dawa group, according to Khalid al-Atiya, an independent member of the bloc. Several days ago, Shiite leaders agreed that Dawa could nominate a candidate if it withdrew Mr. Jaafari's candidacy.

In addition to Mr. Maliki and Mr. Adeeb, Haider al-Abadi, a top aide to Mr. Jaafari and a former minister of telecommunications under the Iraqi Governing Council, emerged as a potential candidate.

Several leaders said the most viable candidate appeared to be Mr. Adeeb, though he is not as well-known as Mr. Maliki. "I don't know much about him and a lot of people don't know much about him," said Mr. Pachachi, a secular Sunni Arab.

Mr. Othman said Mr. Adeeb "looks more acceptable to most people."

At the joint news conference, the mood was slightly more optimistic than in the recent political debate.

"We think this is a remarkable change in the stand of Dr. Jaafari to solve this crisis, and the ball is now in the court of the United Iraqi Alliance," said Tariq al-Hashemi, the head of the largest Sunni bloc, the Iraqi Consensus Front.

But away from the microphones, political leaders cautioned that other fights lay ahead, including a battle over an acceptable candidate to be National Assembly speaker.

The first order of business for Parliament at its next session will likely be the selection of the speaker and his two deputies; approval will require an absolute majority. The post is expected to go to a Sunni Arab, and on Thursday, the Iraqi Consensus Front voted to nominate Mahmoud al-Mashhadani for the post, Mr. Mashhadani said in a telephone interview.

But two senior Kurdish political officials said Mr. Mashhadani was not acceptable. "We don't prefer him, we think he's very much ideological and extremist," said one of the officials, Mr. Othman. "We prefer somebody more moderate."

Mr. Mashhadani was considered a compromise candidate by the Sunnis, who had wanted to put forward Mr. Hashemi. But the Shiites considered Mr. Hashemi too sectarian, and he bowed out several days ago.

At the news conference, Mr. Hashemi said his willingness to step aside should encourage the Shiite alliance to move quickly, too. "The candidates have to enjoy the agreement of all the political blocs that won in the elections, and for that reason I responded," he said.

After the selection of a speaker, Parliament must elect a president and two vice presidents by a two-thirds vote, according to the Constitution. President Talabani is expected to retain his post, and the other two slots will go to a Shiite and a Sunni Arab.

Mr. Mashhadani said the Sunni bloc nominated Mr. Hashemi on Thursday for one of the vice presidencies. Adel Abdul Mahdi, the Shiite politician who lost to Mr. Jaafari in the internal ballot, is expected to be the Shiite's vice presidential candidate.

After that, the president has 15 days to ask the prime ministerial candidate to form a cabinet, and the prime minister in turn has 30 days to name the members. Each candidate needs approval by an absolute majority of Parliament.

American and Iraqi officials say they hope the formation of a unified government will stem the sectarian violence that has bloodied Iraq, with a sharp increase in fatalities among civilians, police officers and soldiers in recent months.

On Thursday, gunmen in camouflage in six pickup trucks stormed two bookstores in Baghdad and kidnapped six people, according to an official in the Interior Ministry. Seven bodies were also found around the capital, the official said.

American and Iraqi security forces continued to come under attack on Thursday. An improvised bomb exploded near a police convoy in the Yarmouk neighborhood in Baghdad, killing a civilian and wounding four policemen, the Interior Ministry official said. An American military convoy in Baghdad was hit by a homemade bomb, wounding two soldiers and seriously damaging a tank, the official said.

In Kirkuk, a convoy belonging to an electricity company traveling between Kirkuk and Tikrit was ambushed by insurgents firing machine guns and rocket-propelled grenades, killing five people, all foreigners, and wounding three others, a police official in Kirkuk said.

In Basra, a car bomb killed two civilians and wounded five others, including three traffic officers and a border guard, the police said.

Abdul Razzaq al-Saiedi contributed reporting from Baghdad for this article, and Iraqi employees of The New York Times from Kirkuk and Basra.