The 275-member parliament had been due to begin discussing proposals for an autonomous region in Shiite areas of central and southern Iraq like that in the Kurdish north.
But stiff opposition from the Sunni Arabs, who threatened to boycott the debate, along with splits within the main Shiite bloc that heads the government, forced leaders to announce a postponement.
Shiite deputy parliament speaker Khalid al-Attiya said the debate on the bill proposed by the Shiite United Iraqi Alliance would now begin on September 19.
One of the main factions in the Shiite bloc, the Supreme Council for Islamic Revolution in Iraq (SCIRI), has been championing proposals for a fully federal system.
But the Sunni Arab minority, which dominated Saddam Hussein's regime and all previous Iraqi governments, is fiercely opposed to a federal Iraq for fear it will leave the country's northern and southern oilfields in the hands of the Kurds and Shiites.
Their main parliamentary bloc, the National Concord Front, has announced it will boycott debate on a proposal it believes will lead inevitably to Iraq's break-up.
"We will boycott the session on the first reading of the draft law and we will stand in the face of all those who want to partition Iraq," said the bloc's leader, Adnan al-Dulaimi.
He said there should be no debate until the review of the constitution had been completed.
Mr Dulaimi's bloc is part of the national unity government of Prime Minister Nuri al-Maliki and its continued participation is seen as essential to preventing Iraq's sectarian divisions escalating into all-out civil war.
Other factions have also called for a pause for reflection, including the secularist Iraqi National List party and the Shiite Fadhila party.
The Fadhila party, which has 15 MPs among the bloc's 128, said adopting a federal structure would be dangerous while US forces and unofficial militias remain deployed in Iraq.
But in a prayer sermon on Friday, SCIRI leader Abdel Aziz al-Hakim insisted a fully federal Iraq was the best way of preventing Iraq's divisions from leading to partition.
Catastrophe 'warning'
The Iraqi Deputy Prime Minister Barham Saleh says there could be regional catastrophe if Baghdad fails in its pacification and reconstruction process, and has urged the international community
to help.
He was speaking at a meeting in Abu Dhabi in the presence of several donor countries, the United Nations and the European Union.
The aim of the meeting was to prepare for the possible launch of a new partnership between Iraq and the international community.
Mr Saleh stressed that Iraq "needs international consensus for its reconstruction... the success of which will not be easy because of the heritage" of the Saddam regime.
A statement released by the meeting's organisers said the Iraqi government recognised that good governance and security were essential if progress was to be made "in all other areas, including an economic revival".
Mr Saleh later told reporters that the "international compact with Iraq" will be discussed during a meeting of donors countries in New York on September 18, as well as during the annual World Bank-International Monetary Fund conference in Singapore on September 18-20 and during a meeting slated for early October
in Baghdad.
"We hope the document will be adopted before the end of the year," he said.
Iraq's al Qaeda links
Meanwhile US officials have insisted that Iraq had a relationship with the Al-Qaeda terror network despite acknowledging that Saddam Hussein was not involved in the 9/11 attacks on US targets.
"We've never been able to confirm a connection between Iraq and 9/11," Vice President Dick Cheney said on NBC, but insisted that a connection with Al-Qaeda was "different issue."
"There are two totally different propositions here. People have consistently tried to confuse them," he said, noting that Al-Qaeda leader Abu Musab al-Zarqawi was in Iraq before the US invasion.
"Zarqawi was in Baghdad after we took Afghanistan and before we went into Iraq. You had the poison facilities run by an affiliate of Al-Qaeda ... This was a state sponsor of terror. He had a relationship with terror groups, no doubt about it," Mr Cheney said.
US Secretary of State Condoleezza Rice also echoed that sentiment on Fox News, insisting that Al-Qaeda operatives were developing weapons of mass destruction in Iraq.
"There were ties between Iraq and al-Qaeda," she said. "We know that Zarqawi was running a poison network in Iraq."
Ms Rice stood by the claim Sunday despite a February 2002 report from the Defence Department's intelligence arm which was just released by a Senate Committee and stated that Iraq was "unlikely to have provided bin Laden any useful (chemical or biological) knowledge or assistance."
"That particular report I don't remember seeing," Ms Rice said when asked if she and president Bush had not ignored the assessment by the Defence Intelligence Agency. "There are conflicting intelligence reports all the time," she said.
Ms Rice said the sectarian violence between Sunni and Shia Muslims which is now plaguing Iraq was set off by al-Qaeda in order to prevent the development of a stable, democratic regime in Baghdad.
“It would simply be wrong to say that the only problem in Iraq is sectarian violence between Sunni and Shia," she said. "There is still a considerable problem of terrorism from extremists who simply want to see Iraq be a part of a Middle East in which the bin Ladens of the world control," she said.
2005 'turning point'
Mr Cheney said history would show that 2005 was the "turning point" in the war.
"Because that's the point at which the Iraqis stepped up, established their own political process, wrote a constitution, held three national elections and basically took on the responsibility for their own fate and future," he told NBC.
Mr Cheney also strongly defended the administration's decision to invade Iraq despite Saddam Hussein having no weapons of mass destruction and no connection to the September 11, 2001 attacks on US targets.
"It is absolutely the right thing to do," he said. "Because if we weren't there, if Saddam Hussein were still in power, the situation would be far worse than it is today."
3 al-Qaeda killed
Meanwhile Iraq's interior ministry has announced its forces had killed three al-Qaeda operatives in a raid on a house in western Baghdad's Karrada district.
"The three belonged to a terror cell headed by Abu Jaafar al-Lybi," said Brigadier General Abdul Karim Khalaf, suggesting that the cell leader was a Libyan citizen. Lybi was not among those killed.
Earlier, a security official said the police found three bodies of men as they raided a warehouse of a company in Karrada.
At least 12 people were also killed in insurgent attacks, including four workers of an oil refinery in the city of Baiji, 200 km north of Baghdad.
Police also found the bodies of 16 other people shot dead in apparent sectarian killings, 10 of them recovered from the town of Suweira, south of Baghdad.
Iraq's ambassador to Iran, Mohammed Majid al-Sheikh, meanwhile, announced that a planned visit by the prime minister to the former foe this week had been postponed until later this month.