Iraq's presidential council has approved a law outlining provincial powers. The law paves the way for elections scheduled in October that officials are hoping will help reduce sectarian tensions. Daniel Schearf reports for VOA from the northern Iraqi city of Irbil.

The Iraqi presidential council announced the agreement late Wednesday, saying the provincial powers law would come into effect in a few days time.

The law outlines the relationship between Iraq's central and local governments and is expected to correct distortions of power in the country ahead of October elections.

It is one of a series of laws pushed by the United States that are aimed at promoting trust between Iraq's rival political factions.

The U.S. embassy in Baghdad welcomed the approval. Embassy spokeswoman, Mirembe Nantongo, says is shows Iraqi leaders are determined to move the political process forward.

"We congratulate all those who have worked so hard to maintain progress on this and other important political issues facing Iraq. We consider this a significant step forward and welcome it," he said.

Washington has pressed the Iraqi government to pass a series of laws seen as benchmarks for national reconciliation.

This year the presidential council approved two of them-a federal budget and an amnesty law.

But in February they rejected the provincial powers law and sent it back to parliament for re-drafting after one of Iraq's vice presidents argued it was unconstitutional.

The council reversed its decision after it was agreed that even after approval the law would be further discussed in parliament and could be amended later.

A long-delayed law on sharing oil revenues has yet to be passed.

The provincial powers law is the first step for provincial elections in October.

The government still has to choose election commissioners and approve an election law.

This year's elections are seen as key to improving trust between Iraq's religious and ethnic groups that are fighting for influence in the country.

Most Sunnis and some Shiite groups boycotted the last elections in 2005, and as a result many local leaders are not supported by their populations.