The election of a respected Kurdish politician as Iraqs new president and his designation of a compromise figure as premier gives the country a fighting chance of achieving stability after years of sectarian bloodshed, war and economic turmoil, said a Reuters report on Wednesday. President Barham Salih, 58, who was elected by parliament, is respected by both the United States and Iran, arch-rivals whose competition for influence in Iraq has fueled factionalism in a country already dogged by deep sectarian rifts. The US embassy in Baghdad and Iranian President Hassan Rouhani both congratulated Salih on Wednesday, raising hopes he might be able to energize the traditionally ceremonial role of president and engage Tehran and Washington to Iraqs benefit. "President Barham Salih has a strong personality and hes well respected by the West and regional countries and most importantly Iran," said senior lawmaker Rebwar Taha from the Patriotic Union of Kurdistan, the party that nominated him, said Reuters. Salihs choice of Adel Abdul Mahdi, 76, as prime minister defuses months of tension between Iraqs two main blocs who hold the most seats in parliament and possess the most powerful militias. His premiership marks the end of 15 years of rule by the Dawa Party, which has dominated Iraqi politics since the toppling of Saddam Hussein in a US-led invasion in 2003. Lawmakers said that was precisely what made Abdul Mahdi an attractive option, especially to powerful cleric Moqtada al-Sadr, who despises Dawa, reported Reuters. Sadr, alongside outgoing Prime Minister Haidar al-Abadi, leads one of the two main blocs. The other is led by Iran-backed militia leader Hadi al-Ameri and former premier Nuri al-Maliki. Ameri and Maliki are Irans two most prominent allies in Iraq. Abadi was seen as the preferred candidate of the United States, while Sadr portrays himself as a nationalist who rejects both US and Iranian influence.PROTESTS Iraq now has its three top leaders - a president, prime minister and speaker of parliament - and is edging closer to forming a new government five months after an inconclusive parliamentary election that was marred by historically low turnout and widespread fraud allegations. The latest appointments come weeks after protests in the oil-rich city of Basra, the jewel of Iraqs southern heartland, threatened to destabilize the country. The governments inability to handle those protests and provide residents with the basic services they were demanding convinced Sadr to abandon Abadi, his ally. "After the unrest in Basra, Moqtada was convinced that a prime minister who failed to bring clean water to his people will definitely fail at bringing stability to his country," said one source close to Sadr. "That was enough for Moqtada to sit with Ameri and accept a compromise candidate, Abdul Mahdi." Salihs election is the first time someone has risen to one of Iraqs top posts without a backroom deal - an outcome that may suggest lawmakers are making the countrys dire needs a priority over political gains. Since Saddams fall, power in Iraq has been shared among its three largest ethnic-sectarian components. The most powerful post, that of prime minister, has always been held by a Shiite Arab, the speaker of parliament by a Sunni Arab and the presidency by a Kurd, though that formula has not guaranteed stability, said Reuters."TRUE POLITICS" Both Washington and Tehran had been vying for months to influence the shape of the incoming government, but neither can claim to be the deciding factor in the presidential outcome. "The outcome was not predetermined. Despite US and Iranian intervention, everyone was on the phones," said Bilal Wahab, a fellow at Washington Institute for Near East Policy who is currently in Baghdad. "It was a unique political process, true politics. But this was an outlier event." Salih designated Abdul Mahdi prime minister less than two hours after being named president. Abdul Mahdi arrived at parliament even before the presidential election was finished, knowing he was already a shoo-in. Abdul Mahdi had the right political pedigree: he is an Islamist but doesnt belong to the Dawa Party and is perceived as a technocrat with a decent track record in government. Getting the approval of Sadr was key. The other big test Abdul Mahdi passed was gaining the blessing of Iraqs top cleric Ali al-Sistani, who has long urged politicians to stop clinging to power and give a new breed of technocrats a chance to rebuild Iraq.