By Mariam Karouny

BAGHDAD, Apr 9 (Reuters) Iraq's Shi'ite leaders met today in another attempt to break an impasse over the prime minister, hoping to pave the way for a unity government many see as the only way to avert open civil war.

The United Iraqi Alliance (UIA) faces mounting pressure to withdraw Ibrahim al-Jaafari as its candidate for prime minister, but finding a replacement could put a strain on the fragile bloc and plunge the country into another political crisis.

Jaafari, who also faces internal opposition from UIA members, has been widely criticised by Kurdish and Sunni politicians for failing to lead Iraq out of a security crisis in his year in power as interim prime minister.

But the Dawa party leader refuses to step aside, raising fears among Iraq's main allies the United States and Britain that the political vacuum will play into the hands of insurgents and fuel sectarian violence.

''The chances of Jaafari staying are getting slim,'' said a senior Alliance source. But not all Alliance officials support that view, underscoring the bloc's divisions.

Three years after the fall of Baghdad raised hopes of a new era of prosperity and democracy, Iraqis are most concerned with surviving suicide bombings, shootings and kidnappings as their leaders bicker.

The latest talks come after three days of bombings on Shi'ite targets that killed more than 100 people and raised fresh fears of open civil war.

Egyptian President Hosni Mubarak has warned that civil war had started in Iraq and that it could spread in the region.

''It's not on the threshold (of civil war). It's pretty much started. There are Sunnis, Shi'ites, Kurds and those types which come from Asia,'' Mubarak said in an interview aired yesterday on pan-Arab satellite television channel Al Arabiya.

The February bombing of a Shi'ite shrine in Samarra touched off reprisals and pushed Iraq closer than ever to open civil war.

Hundreds of bodies have appeared on the streets with gunshot wounds and showing signs of torture as Sunni Arab leaders accuse the Shi'ite-led government of sanctioning militia death squads, a charge it denies.

Washington and London hope the political process will keep Iraq away from the brink of all-out sectarian warfare.

But there are still no clear replacements for Jaafari, only occasional names that are floated which offer little relief for Iraqis still waiting for post-war Iraq's first full-term government.

REUTERS SY RS1519