CAIRO: The US-led coalition in Iraq is threatening the country’s stability by empowering Kurdish and Shiite groups, according to an Arab League (AL) report.

The report, drawn up by an Arab League delegation that visited Iraq in December, also warns that such empowerment could destabilise neighbouring countries.

The report is circulating among the 22-member Arab League, but has not been made public. The Associated Press saw a copy on Saturday.

It reflects the concern among Arab countries that changes in the sharing of power in a post-Saddam government could give too much authority to the Kurdish and Shiite groups, and that those minority groups in neighbouring countries would be inspired to rise up and demand more power.

"Iraqis find geographical and ethnic federalism a prelude to division of the country," the report said.

The report does not name the country’s Shiites, but it uses the term "sectarianism" to refer to Shiite and Kurdish political aspirations.

President Patriotic Union of Kurdistan (PUK) Jalal Talabani rejected the report. The PUK is one of two main Kurdish parties controlling northern Iraq.

"Those chauvinists are trying to demonise federalism to scare simple-minded people and poison their minds," Talabani wrote in an article published on Saturday in daily Asharq al-Awsat.

The Arab League delegation, headed by Assistant Secretary General Ahmed Bin Heli, spent 10 days in Iraq meeting with members of the Governing Council, the cabinet, religious leaders, tribal chiefs and trade union representatives. Its findings will be formally submitted to a meeting of Arab foreign ministers in March and later to an Arab summit.

"The makeup of the Governing Council was among the reasons which have helped to sow the seeds of sectarianism," a section of the 50-page document read.

The majority of 13 seats on the 25-member Governing Council and the Cabinet were given to politicians representing the Shiite majority. The other seats are divided among five Kurds, five Sunnis, one Christian and one Turkman.

Arab League spokesman Hossam Zaki said the report is intended to "reflect what the delegation found" in Iraq rather than to blame any particular group.

"That was our finding. (Sectarianism) might become a source for serious problems," he said.