The clear no to Jaafari -- blamed for failing to curb sectarian bloodshed since the bombing of the Shiite Samarra shrine in February -- came amid a wave of violence that left more than 100 Shiites dead last week.

Jaafari's Shiite United Iraqi Alliance (UIA), the largest parliamentary bloc, had made yet another attempt Sunday to save Jaafari's candidature by setting up a three-member committee to talk to the Kurds and the Sunnis.

The committee was mandated to talk to the two minority groups without whose support a national unity government -- as desired by the United States -- is virtually impossible to be formed in Iraq.

"We have sent a letter to our Shiite brothers explaining that our position remains the same -- that of rejecting Prime Minister Ibrahim Jaafari's candidacy," Thafer al-Ani, spokesman of Sunni-led National Concord Front told AFP.

The National Concord Front has 44 seats in the 275-member Iraqi parliament.

Late Sunday Iraq's Kurdish group also rejected Jaafari's candidature.

"We have once again rejected Jaafari's candidacy," Kurdish lawmaker Mahmud Othman told AFP after a meeting between leaders of the Kurdish coalition in parliament and representatives of Jaafari's party.

The election-winning Shiite bloc, which has 128 MPs, also lacks the overall majority in the 275-member parliament needed to push through a nomination for prime minister on its own.

Jaafari has been facing opposition even from within the alliance, with numerous Shiite MPs demanding his withdrawal, including Vice President Adel Abdel Mahdi, who lost out narrowly to Jaafari in the nomination race.

US ambassador to Iraq Zalmay Khalilzad expressed confidence the deadlock would be resolved soon.

"Other parties (Kurds, Sunnis) have had objections to his nomination. And they're talking about a way out. They're doing that today, and hopefully they will solve that in the next day or two," Khalilzad told CNN Sunday.

For the US, a national unity government is a key for an eventual withdrawal of troops from Iraq.

The US-led coalition forces currently have around 140,000 troops in Iraq.

As the yawning political vacuum created over Jaafari continues nearly four months after the elections, Iraq remains engulfed in a deadly wave of sectarian violence.

More than 100 Shiites have died last week in a series of bombings, some of them targetted at their religious sites in a bid to flare more sectarian killings between the dominant Iraqi community and the minority Sunni Arabs.

The worst was the triple bombings at a popular Baghdad Shiite mosque that killed 90 worshippers as they stepped out of the sanctuary after their Friday prayers.

On Sunday 12 people were killed in a series of bombings and shootings.

Egyptian President Hosni Mubarak and a senior Iraqi minister have declared that Iraq was in a state of civil war.

"On a daily basis Shia, Sunni, Kurds and Christians are being killed and the only undeclared thing is that a civil war has not been officially announced by the parties involved," Iraq's Deputy Interior Minister Hussein Ali Kamal said.

Mubarak said in an interview with Dubai-based Al-Arabiya television said Saturday "there is effectively a civil war underway now."

But an angry Iraq hit back at Mubarak, who also enflamed Shiites across the region when he said their loyalties lay first with Iran.

"The comments have upset Iraqi people who come from different religious and ethnic backgrounds and has astonished and dismayed the Iraqi government," said Jaafari.

President Jalal Talabani said the "accusations against our Shiite brothers are baseless and we have asked our foreign minister to talk to Egypt about this."

British Foreign Secretary Jack Straw, whose government was Washington's main ally in the invasion, also backed Iraqi leaders saying he believed Iraq was not in a state of civil war but that there was a "high level of slaughter."

Meanwhile, Iraq's interior ministry on Monday said it had arrested "30 employees" of a Baghdad security firm for planning "terrorist activities against innocent people."

The employees were picked up from Baghdad's Hamara hotel located in the centre of the Iraqi capital.