The Diyala Salvation Council was set up after the apparent success that tribal leaders had driving al-Qaeda out of al-Anbar province in the west of the country.
Diyala, a mixed Shia and Sunni province northeast of Baghdad, has been among Iraq's most violent areas in recent months.
Sheikh Yunis al-Tai, a Sunni leader who had urged his community to confront al-Qaeda in the province was killed in an explosion at his home in August.
While, on October 29, a suicide bomber on a bicycle killed 30 Iraqi policeman at a base in Diyala, in the deadliest recent suicide bombing in Iraq.
In July, US and Iraqi forces conducted military raids in Diyala province with assistance from local tribal groups, aimed at clearing al-Qaeda strongholds from the province.
US troops entered villages and towns first, while Iraqi forces held the positions afterwards. The military operation was followed by rebuilding efforts in an attempt to win over residents.
However, the approach appears to have met with mixed success as al-Qaeda fighters have responded by moving to other areas within the province.