Iraqi lawmakers are reporting a breakthrough accord among political groups that could ultimately allow for the creation of autonomous regions, including in the country's Shi'ite dominated south. Preparations to debate federalism in Iraq come amid continued violence across the country.

Following closed-door meetings, Iraqi lawmakers announced they are moving forward on two initiatives that, taken together, address the goals and concerns of the country's Sunni and Shi'ite populations.

In what is seen as a compromise between the two rival groups, Iraq's constitution will be reviewed for possible amendment, as Sunnis have sought. At the same time, consideration will be given to creating a federal system, with this week's anticipated reading of a bill that would create autonomous regions for Iraq's major ethnic and religious groups, including a Shi'ite region in the country's oil-rich southern provinces.

Iraq's Kurdish-dominated northern region already functions in some ways as a de facto autonomous zone.

The agreement stipulates that any federalism law will go into effect 18 months after passage.

Jalal Talabani (File photo)

Speaking on CNN's Late Edition program, Iraqi President Jalal Talabani hailed the legislative breakthrough as evidence that his country can avoid civil war.

"As [far as] Sunni and Shi'ites, now we are going to see that the national reconciliation is going forward," said Jalal Talabani.

Violence in Baghdad and elsewhere in Iraq left at least 21 people dead Sunday. U.S. officials say two Marines were killed in fighting in al-Anbar province, while more bodies have been discovered in the capital.

Despite continuing bloodshed, President Talabani insists the security situation in his country is improved.

"Months ago, you had daily in Baghdad 10 to 15 car bombs," he said. "Now, we have two or three or four. There are assassinations continuing still, but less than months ago."

In an interview with CNN's Late Edition program, recorded late last week, President Bush took issue with concerns expressed by U.N. Secretary General Kofi Annan and others that Iraq may be sliding into a civil war.

"The Iraqi government and the Iraqi military are committed to keeping this country together, and, therefore, I reject the notion that his country is in civil war - based upon experts, not based on people who are speculating," said George W. Bush. "I fully recognize that it is still dangerous [in Iraq], and there is still work to do."

Mr. Bush once again defended his decision to invade Iraq, saying Saddam Hussein was a threat that could not be ignored in a post-September 11 world.