The prime minister made no mention of any timetable for the withdrawal of U.S.-led forces in a 24-point national reconciliation plan he presented to parliament.
The plan would include an amnesty for insurgents and opposition figures who have not been involved in terrorist activities, but he never explained how authorities would distinguish that, reports CBS News correspondent Lee Cowan. Al-Maliki stressed that insurgent killers would not escape justice.
"The launch of this national reconciliation initiative should not be read as a reward for the killers and criminals or acceptance of their actions," he said. "There can be no agreement with them unless they face the justice."
The Iraqi leader, who has been in power just over a month, said he was realistic about the difficult road that lay ahead.
"We realize that there is a legion of those who have tread the path of evil (who)... will continue with their criminal acts," he said.
But he held out an offer of peace to those who renounce violence, while threatening retribution and punishment to those who do not.
"To those who want to rebuild our country, we present an olive branch ... And to those who insist on killing and terrorism, we present a fist with the power of law to protect our country and people," he told lawmakers, who applauded his speech.
The plan won the endorsement of the senior Sunni political figure in parliament.
"In the name of Iraqi Accordance Front, I support and agree with this initiative and call upon all Iraqis to support it because it will be the first step toward security, stability and the building new Iraq," said Adnan al-Dulaimi, the leader of Accordance Front, which represents the three key Sunni political parties in parliament.
The Iraqi parliament was to debate the plan, which is believed to face considerable opposition among hard-liners on both sides of the Sunni-Shiite divide.
In other recent developments:
Al-Maliki's reconciliation plan said there should be a timeline established for Iraqi forces to take over all security duties in the country. It included no specifics on the withdrawal of American and British forces, a Shiite lawmaker told The Associated Press.
Al-Maliki said the general amnesty would exclude "those who committed crimes against the Iraqi people."
The most controversial section of the amnesty plan was left ambiguous. Initially it was said to have excluded only those who had killed Iraqi people. But in parliament Sunday, al-Maliki spoke of refusing amnesty to those who had committed terrorist acts, apparently including attacks on American military personnel.
The plan also seeks compensation for former detainees "and those who were killed by Iraqi and American forces." Time spent in prison would be considered as part of a former detainee's mandatory military service.
An early draft of the plan also called for a general pardon for thousands of prisoners who are determined not to have committed "crimes and clear terrorist actions."
Hundreds of prisoners have been pardoned and release in recent months in what is seen as a bid by the Shiite-dominated government to appease Sunni Arab anger over allegations of random detentions and maltreatment.
The proposal also would set rules of engagement for military offensives, requiring military leaders to take into consideration and special conditions that might indicate an attack is not warranted.
That was seen as a bid to alleviate Sunni anger over the alleged killing of innocent civilians and bystanders by U.S. and Iraqi forces.
The reconciliation plan also would call for a reconsideration of policies against supporters of former President Saddam Hussein's outlawed Baath party.
The plan said a dialogue should be opened with all organizations willing to participate in the political process "except al Qaeda" and hard-line supporters of Saddam.
Shortly after taking office May 20, al-Maliki vowed to take over security responsibilities from American and other foreign troops in all of Iraq's 18 provinces within 18 months.