Iraqi state TV says a top court has ruled that PM Nouri Maliki’s bloc is the largest in parliament, in a boost to his bid to stay on for a third term.
The decision would mean the president, who Maliki criticised for not intervening when parliament failed to appoint him, should ask him to remain.
But Arab media cast doubt on the report, carrying an apparent statement by the court denying any decision.
Maliki faces calls to step down amid a jihadist insurgency in the north.
Critics say Maliki, a Shia, has precipitated the current crisis through sectarian policies. Sunnis, Kurds and even fellow Shia have urged him to go. Pro-Maliki security forces took to the streets of Baghdad on Sunday night.
US Secretary of State John Kerry called on the
Iraqi PM not to increase tensions, and warned against use of force by political factions. “The government formation process is critical in terms of sustaining stability and calm in Iraq, and our hope is that Maliki will not stir those waters,” he said during a visit to Australia. Earlier the US, which has urged Iraq to form an inclusive government, issued a statement backing Masum.
“The federal court announces its decision confirming that State of Law is the largest bloc in parliament,” state TV reported. Correspondents say the question of how to define the largest bloc had been a major impediment to Maliki’s ambitions since his election victory in May.
Maliki had announced in a TV address on Sunday night that he was making an official complaint against President Masum in court.
He accused him of “committing a clear constitutional violation for the sake of political calculations and… giving priority to the interests of some groups at the expense of the higher interests of the Iraqi people”.
Maliki’s coalition won the most seats in April’s elections but parliament has not agreed to give him a third term.
Masum had violated the constitution twice, by extending a 7 August deadline for asking the biggest political bloc to nominate a prime minister and then by failing to ask the head of that bloc to form a government, Maliki said.
Shia militiamen and security forces loyal to Maliki reportedly appeared at key centres in Baghdad. There were no reports of violence.
But reports emerged in northern Iraq that Islamic State (IS) militants had captured the town of Jalawla, north-east of Baghdad after weeks of clashes with Kurdish fighters.
On Sunday, Kurdish forces said they had regained the towns of Gwer and Makhmur from the militants, helped by recent US air strikes in Nineveh province.
The US has already launched four rounds of air strikes targeting the militants near Irbil, the capital of Iraqi Kurdistan. The Kurds have appealed for international military aid to help defeat IS.
In western Iraq, minority religious groups, such as the Yazidis, have been forced from their homes, prompting international aid drops.
Witnesses told the BBC that thousands of refugees near Sinjar had escaped to safer areas.
The US air strikes have been the first direct American involvement in a military operation in Iraq since the US withdrawal from the country in late 2011. US President Barack Obama authorised the strikes last week after members of the Yazidi sect were forced to flee Sinjar into the surrounding mountains.