Updated

A U.N. (search) official sided with the United States in its dispute with Iraq's powerful Shiite Muslim (search) clergy over elections, saying Friday it would be hard to organize a vote before the June 30 deadline to hand power to the Iraqis.

But a leading, Pentagon-backed politician, Ahmad Chalabi (search), insisted that elections are possible within that timeframe.

Chalabi, a Shiite member of the U.S.-appointed Iraqi Governing Council, also demanded that power be given to an elected government -- and not one chosen by regional caucuses under the American plan. His comment, made on Al-Jazeera television, signaled protracted wrangling before an agreement can be reached on the transfer issue.

Anti-American forces have increased their violence, apparently in an attempt to wreck the transfer of power, which they fear will install a government both friendly to Washington and acceptable to most Iraqis.

On Saturday, insurgents attacked a police station and a government building in Fallujah, 35 miles west of Baghdad, sparking a gunbattle, killing at least 20 people and wounding 30 others, police and hospital officials said.

The gunmen, riding in vehicles, opened fire on the buildings with automatic weapons and rocket-propelled grenades, police officer Essam Yaseen said.

In the gunbattle that ensued, Iraqi security forces took cover under a hail of gunfire, hiding in doorways and around corners. A petrol bomb burned in the street and a rocket-propelled grenade could be heard whizzing by.

Opposition to the transfer plan put forward by the U.S.-led coalition has increased among members of the Governing Council. Several council members said one option to break the impasse would be to hand over power to an expanded Governing Council until elections could be held in late 2004.

The United Nations' special envoy to Iraq, Lakhdar Brahimi, said major changes will be needed in the U.S. formula for creating the next Iraqi government. But he also said organizing elections by June 30 in the current security climate would be difficult.

Brahimi, a former Algerian foreign minister, warned Iraqis to be wary of the risks of civil war as they compete for power.

The veteran envoy met with council members Friday as he wrapped up a weeklong mission requested by Washington after its plans were shaken by criticism from Iraq's most influential cleric, Grand Ayatollah Ali al-Husseini al-Sistani.

Brahimi said he would report to U.N. Secretary-General Kofi Annan next week and that Annan would make recommendations on how to move forward.

A spokesman for Brahimi said al-Sistani's demand for nationwide balloting probably would be too difficult to pull off by July in strife-ridden Iraq.

"The time between now and June is very short and that makes it unlikely that you can put mechanisms in place," U.N. spokesman Ahmad Fawzi told The Associated Press. "The elections don't have to happen before then."

Brahimi told reporters the Iraqi demand for elections "is legitimate" but "holding reasonably credible elections is also extremely important."

If Annan's recommendation mirrors that view, it could persuade al-Sistani, who has enormous influence among Iraq's majority Shiites, to back off his demands for early elections. But Brahimi's comments could open a new round of wrangling over the best way to pick the Iraqi government scheduled to take power June 30.

The United States argues that security concerns and lack of preparations make quick elections impossible and instead wants regional caucuses to select a provisional legislature. Lawmakers would, in turn, pick a government to rule until elections in 2005. Al-Sistani said a government based on the caucuses would be "illegitimate."

During an interview on Al-Jazeera, Chalabi, a council member, said, "We think elections are possible before June 30."

"We insist on the power transfer (by the end of June) and that sovereignty should be handed over to an elected body that represents the opinions of the people of Iraq," Chalabi said.

Entifadh Qanbar, spokesman for Chalabi's Iraqi National Congress, said his group would gather materials "to prove" an election "is doable before June 30."

Not all the 25 members of the Governing Council share Chalabi's view. However, several members from different factions said Friday that a consensus is growing on the council to scrap the caucus plan and find an alternative for choosing members of the provisional legislature.

One alternative, they said, would be to hand over power to an expanded Governing Council until elections late this year. Support for the proposal appeared strongest among the 13 Shiite council members.

U.S. officials have said they are open to changes in the caucus system but have not said how far they are willing to go. Some Iraqi officials fear the Americans could manipulate caucuses to produce a legislature not truly representative of the Iraqi people.

In Washington, State Department spokesman Richard Boucher denied any suggestion the United States is backing away from its proposal.

"The caucus proposal is definitely on the table," Boucher said Friday. "That's what we and the Governing Council have committed to."

Another U.S. official, speaking on condition of anonymity, said the key unresolved issue is the nature of a sovereign Iraqi authority that would be in charge of the country between June 30 and the time elections are held.

Younadem Kana, who represents Assyrian Christians on the council, said the council could add representatives of parties that either were not invited or chose not to join when the United States picked the members in July. These include Arab nationalists, monarchists and certain Sunni Muslim groups, among others.

The expanded council would take sovereign powers on schedule June 30 but with a limited mandate to organize legislative elections later in the year, according to some council members.

Mouwafak al-Rubaie, a Shiite member, said he believed al-Sistani would accept the expanded council formula though the cleric has issued no such statement.

Asked if the caucus plan was dead, Brahimi said that decision was not his to make but "I think the people who put it together realize that, at the very least, it needs to be improved considerably."

The Bush administration is eager to end the formal occupation of Iraq and turn over security to Iraqis well before U.S. elections in November. As of Friday, 538 U.S. troops had died since the war began 11 months ago.

In the latest attack, a U.S. soldier was killed and two wounded Thursday when an explosive went off in western Baghdad near a military police patrol.