The coalition in Iraq is close to agreeing to hold direct elections before the handover of power on June 30, reports today's Guardian.

"Iraq could become a reasonably functioning democracy, or else it will eventually fall apart," said one senior British official. "Democracy loosens things up."

The official added: "Jack [Straw, the foreign secretary] has been telling Colin Powell [the US Secretary of State] that the process is a bit like riding a bike. You've got to keep it moving, even if it wobbles all over the place."