A preliminary report by the Arab League says efforts to promote power sharing among Iraq's different ethnic and religious groups present a threat to regional stability.
The Arab League says the U.S.-led coalition in Iraq is encouraging what it calls "rising sectarianism" among Iraq's Shi'ites and Kurds by placing representatives of those groups on the interim Governing Council.
The report is based on an Arab League delegation's 10-day visit to Iraq in December, and is being circulated among Arab foreign ministers.
Hossam Zaki, a spokesman for the Arab League who was a part of the delegation, says his group found that many Iraqis are against what they perceive as sectarianism in government.
"A lot of people had the idea that there society is being transformed into a sectarian society and the political apparatuses were being divided on sectarian lines," he said. "They resented it fully and talked about it with a lot of openness."
According Mr. Zaki, the Arab League considers any rise to power by an ethnic or religious group as likely to cause problems both within Iraq and in neighboring countries.
The U.S.-led coalition is scheduled to transfer power to the Iraqis by June 30. It prefers setting up an interim government made up of locally-selected members until elections can be arranged. Some leaders of the majority Shi'ite community want immediate elections. And in the north, some Kurds want autonomy, which Mr. Zaki points out is opposed by many Iraqis.
"While many Iraqis understand that Kurds have suffered for a long time, they do not want to see the Kurds lay the ground for a possible secession, or separation or division of Iraq," said Mr. Zaki.
The Arab League has not said whether it prefers Iraq's transitional assembly to be elected directly or by caucus, but Mr. Zaki says either way, the transition to Iraqi self-rule should be approached gradually.