Iraq's national security adviser has warned the country could descend into civil war if federalism is not entrenched in the constitution.
"Without federalism it means that no community interest has been addressed or fulfilled and therefore different communities will try to find and defend and fight for their rights," Mowaffaq al-Rubaie said.
"Civil war creeps into the country very gradually," he warned.
Several thousand supporters of a Shi'ite cleric Moqtada al-Sadr marched through a district of the capital Baghdad denouncing federalism, saying it would rip Iraq apart.
But Kurds - powerful in the north - want to expand autonomy in their de facto state and some Shi'ites are pushing for their own region in the south. But Sunni Arabs are fiercely opposed to federalism.
January's election boycott left Sunnis with little representation in parliament and, as a result, limited influence in negotiations over the charter. But Iraq's government, led by Shi'ites and Kurds, wants to draw Sunnis into politics in a bid to defuse the Sunni insurgency so the minority sect has some leverage.
Politicians are struggling to overcome sensitive issues such as federalism to meet an extended August 22nd deadline for presenting a draft constitution to parliament.
Differences emerging among Shi'ites could further complicate efforts to strike a deal.
Facing relentless suicide bombings, assassinations and kidnappings, Iraqi leaders are banking on a constitution and elections planned for December to stabilise the country but sectarian tensions are fracturing politics.