Lawmakers said they still had a quorum to vote on the $48 billion budget, as well as an amnesty law that could free thousands of prisoners and a measure defining relations between the central government and local authorities.

Scores of lawmakers stormed out of the legislature on Tuesday, blaming each other for the deadlock and demonstrating the deep distrust that exists between the country's Shi'ite, Sunni Arab and Kurdish politicians. Some MPs said parliament should be disbanded and new elections held.

In recent days, leaders of the political blocs agreed to vote on all three measures as a package because of mutual suspicion that if one was voted on separately and approved, the faction that wanted that most would renege on the rest.

Disputes over the budget have been the main trigger for the crisis, with minority Kurds bickering with Iraq's Arabs over how much money should go to the autonomous region of Kurdistan.

Iraqi officials have complained that failure to pass the budget was holding up vital spending at a time when the United States is urging the government to jumpstart the economy to take advantage of falls in violence in recent months.

In a bid to break the deadlock, lawmakers discussed holding votes in secret and ballot boxes were brought into the chamber. The move was rejected by Kurdish lawmakers. Some lawmakers loyal to influential Shi'ite cleric Moqtada al-Sadr walked out.

MPs said lawmakers had then begun to read each article of each law first and would then vote on all three as a package, as had been agreed earlier this week.

The budget was being read first, but Abdul Karim al-Enizi of the ruling Shi'ite Alliance said hurdles remained.

"We can't say that the three laws will pass easily. We will have heated discussions," he said.

JOURNALISTS TO BE FREED, GROUP SAYS

In the southern city of Basra, a spokesman for Sadr's office there said a deal had been struck to free two kidnapped journalists working for CBS News. The two were reported missing in Basra on Monday.

"We have held talks with the kidnappers to release them. They will be released," said Hareth al-Athari without giving details of when they would be freed.

Sadr's movement has a strong presence in the oil-rich city, and his office had said they would strive to convince the kidnappers to free the two journalists.

CBS issued a statement on Monday saying two of its journalists had gone missing. Police in Basra reported that the men, a British journalist and an interpreter, had been seized from a city centre hotel.

The media has often been caught in the violence that has engulfed the country since the 2003 U.S.-led invasion.

On Tuesday, a local journalist was found dead in central Baghdad two days after being kidnapped, Iraq's Journalistic Freedoms Observatory said in a statement.

The Committee to Protect Journalists in a recent report called the Iraq war "the deadliest conflict for journalists in recent history," with 125 journalists and 49 support workers killed since the March 2003 U.S.-led invasion.