The prospect of government formation in Iraq have brightened up with announcement of an agreement between two major coalitions. The State of law coalition and the Iraqi National Alliance have formed a mutual coalition to form the new government in the country. <br/>According to voice of Iraq news agency the official spokesperson of State of law coalition announced this in Baghdad last evening. He said that discussions between the two parties will continue regarding mechanisms to select the new prime minister of Iraq. Our West Asia correspondent reports that despite the announcement, the two groups have not yet agreed on the contentious issue of a nominee for prime minister and they remain four seats short of the 163 needed to form a parliamentary majority. According to results, State of Law won 89 seats in 325-member Parliament while the INA won 70 seats. Ex-premier Iyad Allawi's Iraqiya list took the 91 seats. The final number of seats gained by each party could yet change as recount of votes is underway in Baghdad, which accounts for 70 parliamentary seats. In addition, one winning candidate from Iraqiya list has already been disqualified while nine election-winning candidates are awaiting a ruling on their disqualification. <br/>