US and Iraqi forces suffered casualties on Saturday as talks on forming a new government foundered over the prime minister's effort to remain in office.

Two US marines were killed in an attack, the military announced on Saturday, bringing its death toll since the beginning of the month to about 35 and marking one of the worst periods for US forces in Iraq.

It said 22 other marines were wounded in the attack but did not provide details. The US military death toll in Iraq since the invasion has reached 2,368, according to an AFP count based on Pentagon figures.

Three Iraqi army soldiers were killed on Saturday when the convoy in which they were travelling was hit by a roadside bomb in Baghdad's dangerous Al-Dura neighbourhood. Eight soldiers were wounded.

As the security forces continue to face attacks, widespread sectarian violence across the country.

The violence comes at a time when the country's political leaders have hit deadlock over putting together a working cabinet four months after elections for the first permanent post-Saddam Hussein parliament, a move that many Iraqi factions see as illegal as long as foreign troops are in the country.

On December 15, large numbers of Iraqis participated in the poll, hoping the new government could rein in violence and bring a better life for Iraq's 27 million people.

"US and Iraqi leaders have failed the Iraqis," Mahmud Othman, a Kurdish lawmaker, told AFP.

"Today, we enter the fifth month since the holding of the elections, and we still do not have a government. In fact we have not even started the process of forming the government by at least having a prime minister.

"This shows that all of us as leaders and the US authorities have failed in Iraq," he said.

In other violence, a police lieutenant colonel in Basra was shot dead while a roadside bomb against a passing police patrol in the northern city of Kirkuk killed one civilian.

A member Talabani's Patriotic Union of Kurdistan (PUK) party was kidnapped from the city Saturday, police said.

PHOTO CAPTION

An Iraqi policeman walks past the wreckage of a car after a bomb exploded on a man installing the explosives to be used as a car bomb, in a residential neighborhood in Baghdad. (AFP)