Sunni Arab negotiator Saleh al-Mutlak also said a deal was struck which would mean parliament could pass no legislation that "contradicted Islamic principles". A constitutional court would rule on any dispute on that, the Shi'ite official said.
"The Americans agreed, but on one condition -- that the principles of democracy should be respected," Mutlak said.
"We reject federalism," he repeated, underlining continued Sunni opposition to Hakim's demands. Hundreds demonstrated in the Sunni city of Ramadi on Saturday, echoing Mutlak's views.
He urged Sunnis, dominant under Saddam Hussein but who have largely shunned politics and, in some cases, taken up arms in revolt, to vote in an October referendum to back a constitution.
Other Sunni leaders are also encouraging their followers to register for the referendum, in part to ensure they can block the constitution if they chose to oppose it down the road. If two-thirds of voters in at least three of Iraq's 18 provinces vote no in October's referendum, the constitution is rejected.
The Kurdish negotiator rushed to make clear his outrage at a deal on Islam: "We don't want dictatorship of any kind, including any religious dictatorship.
"Perhaps the Americans are negotiating to get a deal at any cost, but we will not accept a constitution at any cost," he said, adding that he believed Shi'ite leaders had used the precedent of Afghanistan to win the ambassador's support.
Khalilzad, who has said there will be "no compromise" on equal rights for women and minorities, helped draft a constitution in his native Afghanistan that declared it an "Islamic Republic" in which no law could contradict Islam.
It also, however, contained language establishing equal rights for women and protecting religious minorities.
Actually seems fitting, since as far as I can tell the Bush Administration supports theocracy across the board, even in the United States.