U.S. Ambassador Zalmay Khalilzad warned in an interview broadcast Friday that Iraq faces the possibility of sectarian civil war if efforts to build a national unity government do not succeed. He said such a conflict could affect the entire Middle East.

Khalilzad told the British Broadcasting Corp. that political contacts among Sunni, Shiite and Kurdish leaders were improving, but that within the general population, "polarization along sectarian lines" was intensifying — in part due to the role of armed militias.

Khalilzad warned that "a sectarian war in Iraq" could draw in neighboring countries, "affecting the entire region."

"That's a possibility if we don't do everything we can to make this country work," Khalilzad said. "What's happening here has huge implications for the region and the world."

He said the best way to prevent such a conflict was to form a government including representatives of all groups. That effort has stalled over Sunni and Kurdish opposition to the Shiite candidate to lead the government, Prime Minister Ibrahim al-Jaafari.

Khalilzad avoided any criticism of al-Jaafari. He said many competent Iraqis were capable of leading the government "and Prime Minister al-Jaafari certainly is one of them."

Khalilzad said the international community must do everything possible "to make this country work" because failure "would have the most serious consequences for the Iraqis, for sure, but also for the region and for the world."

Rising sectarian tensions — worsened by armed, religiously based militias and death squads — have emerged as a significant threat to U.S. efforts to form a stable society in Iraq. The threat escalated dramatically after the Feb. 22 bombing of a major Shiite shrine in Samarra, triggering reprisal attacks against Sunni mosques and clerics.

Last month, Khalilzad said that "more Iraqis are dying today from the militia violence than from the terrorists," meaning Sunni-dominated insurgents.

During the BBC interview, Khalilzad cited the role of armed militias in sharpening sectarian tensions, including armed groups associated with Shiite political parties and Sunni insurgents.

"There are lots of unauthorized military formation such as militias ... of course the insurgent groups that are a kind of militia and then of course terrorists that everybody is united against," he said. "What I was saying to the Iraqis is that for the success of Iraq, this problem of unauthorized military formations have to be dealt with."

He said U.S. officials were working with the Iraqis to develop a plan for curbing the militias and would insist that it be implemented.

Khalilzad also confirmed that the Americans had been meeting with groups linked to the Sunni-dominated insurgency. He would not specify the groups nor say when or where the meetings were held.

But he said they did not include Saddam Hussein loyalists or "terrorists," presumably extremists of al-Qaida in Iraq or the Ansar al-Sunnah Army.

"We are talking to people who are willing to accept this new Iraq, to lay down their arms, to cooperate in the fight against terrorists," he said.

Khalilzad said he believed those contacts were responsible for a decline in the number of attacks against U.S. and coalition forces. Last month U.S. troops suffered their lowest monthly death toll in Iraq since February 2005, although the casualty rate has increased somewhat during the first week of April.

But the ambassador also said U.S. and Iraqi officials were "a long way" from an agreement with Sunni-led insurgents that might bring an end to the war.