Updated

Iraq's top Shiite Muslim (search) cleric and coalition officials signaled flexibility on holding early elections, with both sides suggesting they'll follow any U.N. recommendation on whether a direct vote is feasible, Iraqi and Western officials said Wednesday.

Grand Ayatollah Ali al-Husseini al-Sistani's (search) insistence that Iraqi voters choose a transitional legislature has jeopardized a U.S. plan to transfer power to Iraqis and end the U.S. occupation of Iraq by July 1.

A Shiite official who spoke to al-Sistani said Wednesday that if a proposed team of U.N. experts tells the cleric it isn't possible to organize direct elections by July 1, he would accept the verdict.

The British government, the strongest U.S. coalition partner, meanwhile will consider al-Sistani's call for direct elections if a U.N. team determines they're practical, officials told The Associated Press.

British Foreign Secretary Jack Straw, attending an international forum in Davos, Switzerland, defended the coalition process, but expressed hope that Annan will send a team to assess election prospects.

"A large part of this comes down to ... technical issues," Straw said, noting security problems in parts of Iraq and the lack of voter registration. "This needs to be discussed through."

The comments put more pressure on U.N. Secretary-General Kofi Annan (search) to sign off on a request by the Bush administration and the U.S.-appointed Iraqi Governing Council to send a U.N. election assessment team to Iraq.

U.N. officials were in contact with coalition and Iraqi leaders over the possibility of sending the election team, but no decision had been made, U.N. spokesman Stephane Dujarric said Wednesday.

Annan is primarily concerned with the safety of any U.N. staff who would head to Iraq. The secretary-general ordered all international staff to leave Iraq in October following two bombings at U.N. headquarters -- including one on Aug. 19 that killed 22 people.

It's possible he won't decide on sending any election team until a separate U.N. mission of security experts -- heading to Iraq in the coming days -- returns and gives its assessment about whether it's safe to return U.N. staff to the country.

The current American plan, set out in November, involves choosing lawmakers in 18 regional caucuses to be held across Iraq in May. The assembly would then appoint a provisional government that would govern until elections in 2005.

Coalition officials maintain there is not enough time to hold legislative elections before the power transfer because of the unstable security situation and the absence of voter rolls and an election law.

U.S. administrator L. Paul Bremer has offered to broaden participation in the caucus system to accommodate al-Sistani's demands but insists that the July 1 deadline for transferring sovereignty is final.

During a press conference in Baghdad, Ibrahim al-Jaafari, a Shiite member of the Iraqi Governing Council, said he believed al-Sistani would accept any U.N. verdict even it an election team sides with the coalition.

"Based on my conversation with him, if the U.N. team comes and holds a dialogue with the Iraqi side [on] census and electoral matters ... one of the parties may be convinced of what the other party says," al-Jaafari told reporters. "Whatever the outcome, if they reach an agreement, I think al-Sistani will accept it."

Officials traveling with Straw denied a report in the Guardian that the British government has been swayed by arguments from al-Sistani, and that the U.S. government also is shifting ground. But they said the British government is open to ideas as long as they are practical.

"We think the views of Ayatollah Sistani are an important factor," one official told AP, speaking on condition of anonymity. "We are obviously committed to a democratic Iraq, but whatever method is chosen must work in practice."

Tens of thousands of Shiites have marched in Baghdad and other cities this week in support of al-Sistani's demand.

If al-Sistani sticks by his election call, coalition officials, speaking on condition of anonymity, told AP that several options were under consideration, including transferring sovereignty to the U.S.-appointed Iraqi Governing Council.

However, coalition spokesman Charles Heatly on Wednesday denied that "other options such as handing over authority to the Governing Council on the first of July are under serious consideration."

"We're looking forward to the possible deployment of a U.N. technical team and to hearing its assessment," Heatly told the AP. "Meanwhile, we're moving ahead with implementing the Nov. 15 agreement."

Iraqi Shiites, who form an estimated 60 percent of Iraq's 25 million people, have generally refrained from attacks on coalition forces. Most of the insurgents are believed to be Arab Sunnis, including members of Saddam Hussein's Baath party.

In his State of the Union address Tuesday, President Bush said U.S. forces here "are dealing with these thugs in Iraq, just as surely as we dealt with Saddam Hussein's evil regime."

"As democracy takes hold in Iraq, the enemies of freedom will do all in their power to spread violence and fear ... but the United States of America will never be intimidated by thugs and assassins. The killers will fail, and the Iraqi people will live in freedom."

In another Iraq development, 10 people, including three American soldiers, were injured when a roadside bomb exploded near a U.S. convoy west of Mosul, officials and witnesses said. None of the injuries were believed serious.