President Jalal Talabani, a Kurd, was elected to a second term, and the post of parliament speaker went to Mahmoud al-Mashhadani, a Sunni Arab. Al-Mashhadani's two deputies were to be Khalid al-Attiyah, a Shiite, and Aref Tayfour, a Kurd.
Talabani immediately named Shiite politician Jawad al-Maliki as prime minister after his Shiite coalition nominated him Friday, breaking a deadlock which had held up formation of the new government for months.
Sunni Arab and Kurdish politicians signaled they would accept al-Maliki, clearing the way for parliament to elect top leadership positions, including the president.
Al-Maliki replaces outgoing Prime Minister Ibrahim al-Jaafari, whose attempt to stay for a second term had raised sharp opposition from Sunnis and Kurds and caused a deadlock that lasted months as the country's security crisis worsened in the wake of last December's election.
President Bush congratulated the new Iraqi government on Saturday, saying it "will make America more secure" and suggesting that it could be the beginning of an eventual drawdown of American forces from Iraq.
"The new Iraqi government will assume greater responsibility for their nation's security," Mr. Bush said. "It will have the popular mandate to address Iraq's toughest long-term challenges."
CBS News correspondent Kimberly Dozier reports that U.S. officials hope the diversity of faces in the new government will signal to the Iraqi public and members of the insurgency hat they should lay aside their differences, as their leaders seem to have done.
Al-Maliki is one of the top figures in the Dawa Party, the same party as incumbent al-Jafaari. But Maliki is seen as more neutral and fairer, whereas many accused al-Jafaari of allowing sectarian death squads to menace the capital all this past year, Dozier reports.
Secretary of State Condoleezza Rice called him a patriot and "somebody with whom we can work," even if he disagrees with the United States on certain issues.
The nominee for prime minister has 30 days to form a government. Lawmakers must then approve each member of the government by a majority vote. Once finalized the Iraqi government will be in power for four years.
U.S. and Iraqi officials are hoping that a national unity government representing Shiites, Sunnis and Kurds will be able to quell both the Sunni-led insurgency and bloody Shiite-Sunni violence that has raged during the political uncertainty. If it succeeds, it could enable the U.S. to begin bringing home its 133,000 troops.
"It will have the popular mandate to address Iraq's toughest long-term challenges," Mr. Bush said in California. "These are major challenges and the new Iraqi government will not face them alone."
Bush's approval rating is at the lowest point of his presidency, and the daily tide of bad news from Iraq - beheadings and suicide bombings, attacks on U.S. soldiers - is a chief reason.
In other recent developments:
Al-Maliki has a reputation as a hardline, outspoken defender of the Shiite stance raising questions over whether he will be able to negotiate the delicate sectarian balancing act.
From exile in Syria in the 1980s and 1990s, he directed Dawa guerrillas fighting Saddam Hussein's regime. Since returning home after Saddam's fall, he has been a prominent member of the commission purging former Baath Party officials from the military and government. Sunni Arabs, who made up the backbone of Saddam's ousted party, deeply resent the commission.
Al-Maliki was also a tough negotiator in drawn-out deliberations over a new constitution that was passed last year despite Sunni Arab objections. He resisted U.S. efforts to put more Sunnis on the drafting committee as well as Sunni efforts to water down provisions giving Shiites and Kurds the power to form semiautonomous mini-states in the north and south.
Sunnis and Kurds had blamed the rise of sectarian tensions on al-Jaafari for failing to rein in Shiite militias and Interior Ministry commandos, accused by the Sunnis of harboring death squads. Those parties refused to join any government headed by al-Jaafari.
Al-Jaafari, who has served as prime minister since April 2005, was nominated by the alliance for a second term in February by a one-vote margin, relying on support from radical, anti-American cleric Muqtada al-Sadr.
Since then, al-Jaafari had stalwartly rejected pressure to give up the post, until Iraq's most powerful Shiite cleric, Grand Ayatollah Ali al-Sistani, sent word that he should go. On Thursday, al-Jaafari gave the alliance the go-ahead to pick a new nominee.
Sunni and Kurdish politicians blamed the rise of sectarian tensions on al-Jaafari for failing to rein in Shiite militias and Interior Ministry commandoes, accused by the Sunnis of harboring death squads. Those parties refused to join any government headed by al-Jaafari.
He stepped down after Iraq's most powerful Shiite cleric, Grand Ayatollah Ali al-Sistani, sent word that he should go, according to some lawmakers.