On Monday, outgoing Prime Minister Nuri al-Maliki said "We reject the constitutional violation," referring to the selection of Haidar al-Abadi, a member of his party, to form a new government.
Maliki accused the US of standing on "the side of violating the constitution."
"The nomination of Abadi is a clear violation of the constitution", Maliki said in a televised address.
His speech came after Abadi, a relatively low-profile politician from the same Shiite bloc as Maliki, secured the nomination to become Iraq’s new Prime Minister.
A Shiite politician considered close to Maliki, Abadi was born in Baghdad in 1952 and returned from British exile in 2003 when US-led forces toppled Saddam Hussein.
Abadi’s appointment by Iraq’s President Fuad Masum has left Iraq’s Shiite block divided with some factions backing Maliki and others supporting Abadi.
The international community, however, was quick to throw its weight behind Abadi, with UN Secretary General Ban Ki-moon expressed his support for Abadi, and US Vice President Joe Biden welcoming the development as a “key milestone.”
But despite the chorus against his premiership, Maliki has refused to step down, slamming the US for ignoring what he called constitutional violations.
“There is no value to Abadi’s candidacy – it was done outside the framework of the constitution. The US has failed to condemn this infringement,” Maliki said.
Maliki has also called on the army and police forces to remain in their current positions, although it is unclear which side the army will ultimately support.
Police officers and army troops both deployed in large numbers on the streets of Baghdad late on Sunday night, gathering around key institutions and closing roads just before Maliki gave his first speech at midnight on Sunday.
Eye-witnesses quoted by Forbes also said that forces loyal to Maliki shut down Baghdad International Airport, leading to fears of a possible coup attempt, with the UN warning about a possible security force intervention.
"The Iraqi security forces should refrain from actions that may be seen as interference in matters related to the democratic transfer of political authority," top UN envoy in Iraq Nickolay Mladenov said.
The army has since tried to distance itself from Maliki and in statement posted on its Twitter page on Monday afternoon, the Iraqi army stressed that it was “the army of Iraq, not of Maliki.”
The current political impasse started when the Shiite coalition headed by Maliki, who has led Iraq since 2006, won the majority of vote in the April elections but failed to secure an outright majority.
Maliki subsequently found himself unable to form a government, with many blaming him and holding his increasingly sectarian policies partly responsible for the latest outbreak in violence.
The US had previously hinted that further assistance was conditional on Maliki stepping down, with even long-term backers Iran voicing their growing disquiet about Maliki behind the scenes.
If successful, his removal could pave the way for the formation of a new unity government that many hope can start the difficult process of trying to unite the war-torn country.
"The United States stands ready to fully support a new and inclusive Iraqi government," Brett McGurk, the US deputy assistant secretary of state for Near Eastern Affairs, said. France also responded to moves to oust Maliki, calling on Abadi to act and form a "national unity government."
Some analysts suggest that further turbulence lies ahead if Maliki refuses to step down. "Maliki is using a scorched earth policy when refusing to step aside and allow a new government be formed," Sabah al-Mokhtar, an Iraqi-born observer who heads the Arab Lawyers Association in London, told MEE. "The reason Maliki said he would sue the president is because he has a loyal ally in the judiciary, that has frequently backed him," he added. But other observers say that naming Abadi as premier has complicated matters and may further divide the country.
"The move is unconstitutional and it complicates matters, further threatening the unity of Iraq," said Sadiq Altaai, an Iraqi analyst based in London. "Maliki has many loyal followers in the army which he personally appointed. If they stand by him then the national army would be split," warned Altaai.
The political showdown occurred as the U.S. – which on Thursday launched airstrikes against IS militants - announced that it had begun arming Iraqi Kurdish fighters in the north of the country.
"We're working with the government of Iraq to increasingly and very quickly get urgently needed arms to the Kurds," State Department spokesperson Marie Harf told CNN.
"This includes the Iraqis providing their own weapons from their own stocks, and we're working to do the same thing from our stocks of weapons that we have."
The Kurdish Peshmerga have been battling Islamic State militants since the group launched a Sunni offensive against Baghdad on 9 June and succeeded in seizing swaths of territory in the west and north.
In the wake of the IS offensive, Maliki accused the Kurdistan Regional Government of siding with IS and the "caliphate" it declared in late June over parts of Iraq and Syria.
The fight against IS and its large gains, were cited by US President Barack Obama as a key driver in the US decision to send warplanes back over the skies of Iraq for the first time since the last US troops withdrew in 2011.
Obama's other key justification involved an impending genocide against the Yazidi minority.
Three days of strikes by US jets and drones appeared to make an impact on both fronts, raising hopes that US intervention could turn the tide on two months of IS-led expansion.
"The Peshmerga have liberated Makhmur and Gwer," Peshmerga spokesman Halgord Hekmat told AFP, adding that "US aerial support helped".
However, there are fears that US-arms bound for the Kurds will be used at later stage against the central government in Baghdad once the IS threat is gone.
"This is sowing the seeds of a future war [between Kurds and Arabs] over the territories that are now under Peshmerga control but were previously guarded by the national army [before the IS onslaught]," said Altaai.
