One of the 275-member assembly's first acts on Tuesday was to renew the country's state of emergency, with a vote of 161 in favour to 19 against extending the measure.
The emergency decree, granting security forces greater powers, has been renewed every month since it was imposed in November 2005, hours before US and Iraqi troops began an offensive to drive fighters out of the city of Falluja, west of Baghdad.
The parliament's speaker, Mahmud Mashhadani, opened the session in the parliament building in Baghdad's heavily-fortified Green Zone by calling for national unity in an attempt to curb the increasing violence, with Nuri al-Maliki's coalition government struggling to unite Iraq's warring factions and end the ongoing bloodshed.
"I urge all people of goodwill to come forward to support the national reconciliation project, otherwise we will face the worst period in modern Iraqi history," he said.
"We are the elected leaders of Iraq and I'm confident that the terrorists will not succeed in what they do."
Abbas al-Bayati, spokesman for the largest Shia bloc, the United Iraqi Alliance, predicted: "In the next few sessions the parliament will discuss the law for the formation of provinces."
The plan to devolve power in Iraq runs along regional lines with provinces forming larger autonomous regions including the largely Shia south, the Kurdish north and the central and west of the country, populated mainly by Sunnis.
"I urge all people of goodwill to come forward to support the national reconciliation project, otherwise we will face the worst period in modern Iraqi history"
Mahmud Mashhadani, parliament speaker
Politicians divided along religious and ethnic lines have different opinions on the plan.
The Kurdish north has enjoyed broad self-rule for 15 years, allowing it to escape the worst of the violence plaguing Arab areas, and is virtually united behind demands for this to be legally enshrined.
Many Shia leaders - some allegedly encouraged by neighbouring Iran - also want to split away areas in central and south Iraq which hold Shia shrines and pilgrimage sites as well as rich oilfields.
Sunnis, who prospered under Saddam Hussein's former government, generally favour a strongly centralised Iraq that would guarantee their rights as a minority.
Another issue likely to generate fierce debate among parliamentarians is the national flag, which the president of the autonomous Kurdish region, Massud Barzani, has refused to fly, arguing that it represents Saddam's government.
Sunni politicians issued a statement before parliament opened, calling on Kurds to accept the flag as an interim measure while parliament debates the design of a new symbol acceptable to all Iraqis.
Barzani says the Iraqi flag
represents Saddam's government
Elsewhere on Tuesday, the British foreign secretary, Margaret Beckett said that transferring control of Iraq's security from the US-led military to the government was essential.
Beckett arrived in Baghdad late on Sunday night for her first trip to the country since taking up her post in May, and met on Monday morning Barham Saleh, Iraq's deputy prime minister.
"There has been responsibility that has been transferred already and we hope and believe that that is a process that will continue," she said about Iraqi forces assuming responsibility for the country's security, adding it was "absolutely key that we see that responsibility being able to be exercised by the representatives of the elected government of Iraq".
The US-led military has been gradually handing over security control in parts of the country to Iraqi forces.
British forces handed over control of the southern Muthana province to their Iraqi counterparts in July, and al-Maliki, the prime minister, announced last month that another southern province, Dhi Qar, would follow in September.