The parliament session had initially been scheduled for Monday with hopes of breaking the impasse to forming a national unity government among Shiite, Sunnis and Kurds four months after a landmark election.
The deadlock coincided with a surge in violence that has raised fears the country is on the edge of an all out civil war.
"We decided to postpone for a few days the holding of the parliament," said MP Bassem Sharif, a member of the parliament's most powerful bloc, the Shiite United Iraqi Alliance.
The decision was taken "to give time to all the parliamentary blocs to finalise their candidates and reach an agreement on all the parliamentary posts," Mr Sharif said.
The main point of contention has been the 128-member Shiite bloc's choice of embattled Prime Minister Ibrahim Jaafari as the next premier.
Sunnis and Kurds are opposed to Mr Jaafari staying on as premier, blaming him for failing to curb sectarian violence.
Sunnis believe the Shiite-led government has stocked the interior ministry with death squads that are killing Sunnis, who are blamed for running the insurgency.
The Sunni bloc also fears the Shiites may oppose their candidates for other key cabinet posts.
Zhafer al-Ani, spokesman of the Sunni-led National Concord Front, said his 44-member parliament bloc had finalised candidates for three posts. Top Sunni leader Adnan al-Dulaimi has been slated for vice president, Tareq al-Hashemi for parliament speaker and Khalaf al-Alyan for deputy prime minister.
Kurdish MP Mahmud Othman said Kurdish groups had not yet finalised their government list but insisted that outgoing head of state "Jalal Talabani will be the candidate for president."
Meanwhile, Baghdad's new ambassador to Washington, Samir Sumaidaie, told US television that Prime Minister Jaafari is likely to be replaced by fellow Shiite politician Ali al Adib,
"A number of names have been mentioned. But leading amongst them is Ali al Adib, who is from al-Jaafari's own party," Ambassador Sumaidaie told CNN.
As a member of Mr Jaafari's Dawa party he "would stand for the same things that al-Jaafari stands for," the Iraqi diplomat said, adding that a decision on a successor would fall within days.
"I believe that whoever is put forward and will be agreed upon will have to be acceptable to all. And I believe that we are now close to a solution which is acceptable to all," he said.
Mr Sumaidaie said reaching consensus on a successor to Jaafari is a key step toward creating a stable Iraq.
Insurgency continues
As the political negotiations were hit by further setbacks, at least 31 people were killed in a string of attacks around Iraq on Sunday.
In the deadliest attack, a car bombing near a market in the town of Mahmudiyah, 30 kilometres south of Baghdad killed 10 people, an interior ministry official said.
Gunmen shot dead seven construction workers in the restive northern Iraqi city of Mosul, police said.
A bomb blast in a minibus in a Baghdad neighbourhood killed four people, and in a separate attack another four people travelling in a minibus near the restive town of Baquba were killed when gunmen ambushed the bus and opened fire on it, police said. Six more Iraqis were killed in various attacks across the country.
The US military announced that four marines had been killed in the western Al-Anbar province, bringing the US military's death toll in Iraq since the invasion to 2,373 according to an AFP count based on Pentagon figures.
A pre-dawn raid by the US military on a suspected al-Qaeda hideout southwest of Baghdad also left five alleged insurgents and a woman dead.
Meanwhile gunmen driving a police vehicle kidnapped 15 employees from two Baghdad businesses, an investment firm and a mobile phone company.