Nuri al-Maliki told the Iraqi parliament on Wednesday that a national reconciliation plan he has promoted was Iraq's "last chance" to stem the violence.
"If it fails, I don't know what the destiny of Iraq will be," he told the assembled Iraqi lawmakers, including representatives of the country's minority Sunni community who had staged a week-long boycott of parliament in protest at the kidnapping of a colleague.
Al-Maliki has offered talks with some Sunni fighters and a limited amnesty under his 24-point plan in a bid to draw Sunnis, the seat of the uprising, further into the political process.
The prime minister's comments came as Donald Rumsfeld, the US secretary of defence, held talks with Iraqi leaders on the escalating sectarian violence in the country during a visit to Baghdad.
Rumsfeld said he remained confident that Iraq would recover from the violence plaguing much of the country and would become a "great success" for the region, although he said it was also too early for the US to discuss adjusting troop levels in the country.
Hours after al-Maliki spoke, clashes erupted between fighters armed with rocket-propelled grenade launchers, and police and residents in Um al-Maalif, a mainly Shia neighbourhood in southern Baghdad. Police said at least two people were killed.
Also on Wednesday, Iraqi security forces said the bodies of 20 bus drivers kidnapped earlier from a bus station in religiously mixed Miqdadiya, north of Baghdad, were found blindfolded and bound in a nearby village. They freed four others from a house.
"We make a mistake if we take the security question and think of it as separate from everything else'
US defence secretary
Major-General Ghassan al-Bawi, the police chief of Diyala province, said the killings were aimed at undermining a reconciliation accord agreed by Sunni and Shia tribes in the area. There were conflicting reports on the victims' religious affiliation.
General George Casey, the US commander in Iraq, said that Shia death squads were behind a spike in recent violence in which scores of people have been killed in Baghdad neighbourhoods.
"What we are seeing now ... are death squads, primarily from Shia extremist groups that are retaliating against civilians," he said.
"So you have both sides now attacking civilians. And that is what has caused the recent spike in violence here in Baghdad."
Rumsfeld [r] said reconciliation
was essential for success in Iraq
Rumsfeld also said that the US military was adapting its tactics in an attempt to combat the ongoing violence in Iraq.
However, he said the solution to ending communal bloodshed is "not military".
"We make a mistake if we take the security question and think of it as separate from everything else. The prime minister's effort with respect to reconciliation will be critically important in achieving better success," he said.
Meanwhile, the US military said on Wednesday that Saddam Hussein, the former Iraqi president, and three of his co-defendants had been on hunger strike for five days to protest against court procedures and the killing of their defence lawyers.
Saddam's lawyer said the protest had lasted for seven days and he was concerned about the former president's health.