"The Americans have entered into negotiations with some of these groups with my blessing and I think it is possible to reach an agreement with the seven armed organisations," Talabani said in a statement released by his office.
He did not name the groups but said they were fighting what they regarded as US-led occupation. There was no immediate reaction from US officials.
"We want to have a dialogue with them and they can join the political process," Mr Talabani said.
"They visited me and I met them. As there is broad freedom to express opinion, there is no justification for armed action," said the president, who is himself a Kurdish former rebel leader.
Syria blamed
He also charged that neighbouring Syria was the "main source" of the insurgency in Iraq that has left thousands dead, three years since US President George W Bush announced the end of major combat in Iraq on May 1, 2003.
The US military classifies Iraqi insurgent groups into three categories, Al-Qaeda-led foreign fighters, groups loyal to ousted president Saddam Hussein and "rejectionists" who simply oppose a US presence in Iraq.
Mr Talabani has repeatedly urged Iraqi insurgent groups to join the political mainstream, especially after the widespread participation of Sunni Arabs in December's elections for the first full-term government since the invasion.
Washington hopes strong Sunni participation in a new national unity government will wean the former elite away from the insurgency and eventually allow its troops to come home.
Factions disagree
Coalition hopes of a swift end to the prolonged power vacuum since December elections took a knock with a new row between the Shiite majority and the disenchanted Sunni minority.
The Shiite United Iraqi Alliance angered Sunni politicians by announcing that it wanted to see pro-Western former premier Iyad Allawi, a secular Shiite, take the deputy prime minister's post one of their number had formerly held.
"We think that Allawi's list has a right to this post and the Kurds are supporting us," said Alliance MP Hussein Shahristani.
But the main Sunni parliamentary bloc, the National Concord Front, said it was vital for the minority community to be given one of the two deputy premierships if the insurgency in Sunni areas was to be calmed.
"We insist on having this post because it will concern the security issue," the Front's spokesman, Zhafer al-Ani, said.
"All troubles in Iraq are in Sunni areas, so it is important to have a Sunni deputy prime minister."
Parliamentary blocs agreed earlier this month to the formation of a committee to oversee security issues on the unwritten understanding that a Sunni deputy premier would sit on the body alongside the prime minister, who is a Shiite.
The Iraqi parliament is to convene Wednesday for only the third time since December elections, a source close to the assembly said.
Prime minister designate Nuri al-Maliki is not expected to attend the session although he still hopes to finalize his cabinet line-up by May 10, the source added.
Contractors killed
Britain announced that three people had been killed and four wounded in two separate attacks on security contractors.
Three people were killed and two wounded when a private security convoy came under attack south of Baghdad, an embassy spokesman said, without elaborating on the nationality of the casualties.
Britain's domestic Press Association news agency said no Britons were killed but one was wounded.
In a second attack near the main southern city of Basra Saturday, two
British civilians were wounded in a roadside bombing, a British military spokesman said.
He said the attack targeted a private security convoy near Al-Qurna, northwest of the city but added both Britons were "okay".
In other attacks, four Iraqis were killed including the driver of the police chief of the restive city of Samarra, north of Baghdad.