Seeking to guide the elections from behind the scenes so that enough Sunni Muslims turn out and give the new legislature legitimacy, the US also suggested Iraqi leaders should give Sunnis government posts after the vote.
"We are encouraging all Sunnis to join in this effort, to say no to terrorism, no to murder, and yes to democracy," Powell said at a news conference on Monday, the same day the top Sunni party in Iraq withdrew from the ballot.
"We are also talking to all of our friends in the region, the neighbouring countries that have influence and contacts with the Sunni community, to get them to encourage Sunni leaders to turn out to vote."
Nevertheless, the Iraqi Islamic Party cited intimidation as the main reason it was pulling out of the 30 January election and said violence in the Sunni north and west meant the vote could not be free and fair.
Anti-US sentiment is fiercest in
Sunni areas across Iraq
But the party did not specifically call for a boycott among Sunni Arabs.
Voters will choose 275 members of a national assembly, which will appoint a new government to succeed the interim administration appointed in June by Washington.
While Powell denied the US wanted to create a voting mechanism for adding Sunni assembly seats, the top US diplomat suggested Iraqi leaders should try to include Sunnis in the post-election government.
"For the government to be representative and for the government to be effective, the transitional national assembly would certainly have to take into account the ethnic mix of the country and find a way to make sure that all segments of the country believe that they are playing a proper role in the government," he said.
However, Iraq's Independent Election Commission had earlier rejected a move by Washington to adjust the results of next month's vote to benefit the Sunni community.
Speaking of "unacceptable" interference, Commission spokesman Farid Ayar said: "Who wins, wins. That is the way it is. That is the way it will be in the election."
Ayar was emphatic in dismissing such a possibility, and suggested US officials were trying to interfere.
"Maybe they didn't read the rules and regulations of the commission ... The Americans are expressing their views and those aren't always the same as the commission's. But the commission is absolutely independent.
"It is not acceptable for anyone to interfere in our business. That will not be allowed to happen," he said.