The United Nations envoy who helped put together Iraq's new government urged Iraqis on Wednesday to accept the new interim leadership and work toward national elections — the next major step in the country's advance toward democracy.

However, Iraq's largest Shiite (search) political party said it had reservations about the system used for choosing the government, which was announced Tuesday by U.N. envoy Lakhdar Brahimi (search). The government takes power June 30 until new elections due by Jan. 31.

On Wednesday, Brahimi told reporters that the new government may not be perfect but it was the best one possible under the circumstances.

"Will every Iraqi be satisfied of the present government? Definitely not," the former Algerian foreign minister said. "I believe many Iraqis, if not all, will find in this government those whom I don't say represent them but are close to them."

Brahimi said the upcoming election — which will create a national assembly that will form a new government — is "the most important (next) step."

"Preparing for it and creating the necessary atmosphere for it are imperative for its success," he said.

Grand Ayatollah Ali al-Husseini al-Sistani (search), the most influential Shiite cleric in the country, has been kept informed of developments in the process, Brahimi said. But he made clear that al-Sistani was not directly involved in the negotiations that led to the selection of a president, prime minister and the 32-member Cabinet.

Al-Sistani's views are respected by most of Iraq's Shiites, who make up about 60 percent of Iraq's population. Shiites have played a key role in politics since the overthrow of Saddam Hussein nearly 14 months ago and are likely to emerge as the most powerful constituency after the January ballot.

Al-Sistani has yet to make public his views on the new government, which is led by Iyad Allawi (search), a secular Shiite.

However, the Supreme Council of the Islamic Revolution (search) in Iraq, or SCIRI, Iraq's most influential Shiite party, expressed reservations about the "mechanisms of dialogue" used in selecting Cabinet members.

SCIRI also complained of the "marginalization and exclusion" of what it called popular political and Islamic personalities.

It did not elaborate, but party appeared to allude to reports of heavy-handed methods used by U.S. officials in Baghdad employed to ensure that the next government was not hostile to American policies in Iraq.

SCIRI also demanded that a consultative council expected to be set up next month to oversee the new government be given legislative rights and absorb those who were excluded from the Cabinet.

Brahimi has said the council will be more than an advisory body but not a full legislature.

On Wednesday, he said a committee was set up to prepare for a national conference that in turn will choose a consultative council with about 100 members.

The new government was announced after Iraqis pushed through the head of the Governing Council, Ghazi al-Yawer (search), as president after U.S. favorite Adnan Pachachi (search) stepped aside.

"Ghazi al-Yawer is qualified to fill this post and we are fully confident that he will carry out his duty with efficiency," Brahimi said.

The U.S.-picked Governing Council dissolved on Tuesday to let the new leadership could begin work even before it takes power from the American-led coalition at the end of the month.

Among the first tasks of the transitional government will be to negotiate a crucial agreement on the status of U.S.-led international forces that will remain here after sovereignty is restored to tackle the country's tenuous security situation.

At the U.N. Security Council (search) on Tuesday, the United States and Britain circulated a revised resolution that would give the interim government control over the Iraqi army and police and end the mandate for the multinational force by January 2006 at the latest.

But France, Russia and Germany said they were still not sure if the revisions went far enough. They have pressed for the resolution to grant the Iraqis genuine power over their own national affairs.

Iraq's new foreign minister, Hoshyar Zebari, was traveling to New York to join the debate.

The new Cabinet — a prime minister, a deputy premier for security and 31 ministers including six women — will take over day-to-day operations of government ministries immediately, although the U.S.-run Coalition Provisional Authority (search) remains the sovereign power in Iraq until June 30.

The British-educated Allawi, a longtime opposition figure known for his close ties to the State Department and the CIA, was named prime minister on Friday.

The Cabinet draws its membership from Iraq's ethnic, religious and cultural mosaic, bringing together lawyers, politicians, academics, human rights activists, engineers and businessmen from a broad spectrum. It contrasts sharply with Saddam Hussein's regime, which revolved around a Sunni Muslim clique from his hometown of Tikrit.

President Bush said Tuesday's announcement brought Iraq "one step closer" to democracy, but warned that violence will continue to increase as the date for the restoration of sovereignty draws near.

Security remains the primary threat facing the new government.

Brahimi on Wednesday hinted that Iraq's leaders should talk with the fighters.

"Why is there — to use neutral terms — this insurgency?" he said. "I think it's a little bit too easy to call everyone a terrorist."

During the ceremony welcoming the new government Tuesday, Allawi focused on security, saying he would ask Iraq's allies for help "in defeating the enemies of Iraq."

He also pledged to strengthen the army and raise soldier pay. Iraq's security forces, he said, will be a "pivotal partner" with U.S. and other coalition troops in the fight to restore security.

Switching from Arabic to English for the benefit of coalition leaders in the audience, Allawi said: "We're grateful to the national alliance led by the Americans who have sacrificed so much to liberate us."

More than 800 U.S. service members have been killed since the invasion of Iraq in March 2003.

Coalition troops are fighting a Sunni insurgency in the capital and areas to the west and north as well as a Shiite revolt in Baghdad and in the south. Homicide bombings have claimed hundreds of lives across the nation.