The Iraqiya coalition, which won the most seats in Iraq's March 7 parliamentary poll, has alleged an alliance between Iraq's two main Shia blocs is an "Iranian orchestrated" sectarian move.
"Iranian finger prints are obvious in the way the alliance was formed and announced," Haidar al-Mulla, a spokesman for Iraqiya, told Al Jazeera.
The Sunni-backed list led by Iyad Allawi, a former prime minister, also accused Nouri al-Maliki, the incumbent prime mimister, and his allies of clinging to power at the expense of Iraqi people.
"We will never be part of a sectarian government. Iraqi people refused sectarianism when the majority of them gave their votes to our list, which includes all Iraqi factions, religions, ethnicities and sects," al-Mulla said.
Khalid al-Asadi, co-founder of al-Maliki's State of Law list, denied the allegation.
"Actually, those who describe our alliance [with the Iraqi National Alliance] as sectarian are sectarian themselves," he told Al Jazeera.
"We consider this accusation a kind of sectarian incitement. We are patriots who promote a civil state in Iraq."
The deal, which was struck late on Tuesday between the country's two biggest Shia Muslim alliances, allows them to sideline the secular Iraqiya coalition, which won the most seats in the election but failed to build a parliamentary majority.
Discussions about who will become prime minister are now under way between the Shia parties, al-Asadi told Al Jazeera.
However, it is widely believed that the agreement came to light only after assurances were given by the State of Law that al-Maliki would not continue in his post.
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"Mr al-Maliki has left the decision to the leadership of the alliance. There are certain internal methods to choose the PM candidate at the end of the day, and everyone should respect them," al-Asadi said.
There was no immediate reaction from the United States, which in the past week urged Iraq's politicians to set aside their differences and speed up the process of forming a coalition capable of running the country.
The new Shia alliance remains four seats short of the 163 needed to form a parliamentary majority but is still likely to take office.
According to full preliminary results from the election, State of Law won 89 seats in the 325-member Council of Representatives while the INA, led by Shia religious groups, won 70 seats.
The Kurdish Alliance, made up of Iraq's autonomous northern region's two long-dominant blocs and holding 43 seats, has previously said it would join the coalition once the two main parties sorted out their differences.
The final number of seats gained by each party could yet change, however, as electoral authorities are conducting a recount of votes in the key Baghdad constituency, which accounts for 70 parliamentary berths.
In addition, nine election-winning candidates are awaiting a ruling on whether or not they will be allowed to take office. One winning candidate, from Iraqiya, has already been disqualified.