Shiites and Kurds have been haggling over the makeup of the new government ever since the Jan. 30 ballot elected a new national assembly. Parliament meets Wednesday.
The political deal calls for Jalal Talabani, a Kurdish leader, to be named president. Conservative Islamic Dawa party leader Ibrahim al-Jaafari of the Shiite majority United Iraqi Alliance coalition, would become prime minister.
"We're not interested in the government posts, we're more interested in Kurdistan and Iraq's interests," Talabani told reporters in the northern city of Sulaimaniyah, 160 miles northeast of Baghdad.
"We have made good progress. We have a common understanding with the United Iraqi Alliance that we should establish an Iraqi state based on the principles of federalism and respecting human and women's rights," Talabani said.
In other developments:
Ali al-Dabagh of the clergy-backed United Iraqi Alliance said he was optimistic a final deal would be reached with the Kurds before parliament meets Wednesday. But "if no agreement is reached, the first session of the national assembly will be held on Wednesday anyway," he said.
Outside the northern Iraqi city of Irbil on Sunday, Kurdish leaders met Sunday to hammer out final details on a coalition government in accordance with a deal reached earlier this month with the Shiite-dominated United Iraqi Alliance.
"The basic Kurdish demands are not about the Kurds only but the whole of Iraq, we are working for an Iraqi process — a coalition government that respects the constitution," said Interim Deputy Prime Minister Barham Saleh, a Kurd.
Interim Foreign Minister Hoshyar Zebari, also a Kurd, said a Kurdish delegation was to meet with the alliance again on Monday before the deal is announced, emphasizing that a final agreement was close.
Talibani, Saleh and Zebari all headed to Baghdad from the north on Monday.
The Kurds won 75 seats in the 275-member National Assembly during Jan. 30 elections. The alliance won 140 seats and needs Kurdish support to assemble the two-thirds majority to elect a president, who will then give a mandate to the prime minister.
Since 1991, Kurds enjoyed de-facto independence, protected from Saddam's military by a U.S.-enforced no-fly-zone. The Kurdish enclave has since then been off-limits to the Iraqi army.