(Adds quotes, analysis, background)
By Jeff Mason
CHILMARK, Mass., Aug 11 (Reuters) - U.S. President Barack Obama said on Monday Iraq had taken "a promising step forward" in designating a new prime minister, vowing to step up support for a new Iraqi government in a widening conflict that his administration had hoped to avoid.
Speaking to reporters in the Massachusetts island of Martha's Vineyard, where he is vacationing with his family, Obama said Iraq had made important strides toward rebuffing fighters from the Islamic State, an al-Qaeda offshoot, since the United States authorized air strikes last week.
He urged the quick formation of an inclusive government to address the needs of all Iraqis.
"Today Iraq took a promising step forward in this critical effort," Obama said in brief remarks.
Obama's comments and a congratulatory telephone call he made to Iraqi Prime Minister-designate Haider al-Abadi signal the administration's expectation, or hope, that Prime Minister Nuri Kamal al-Maliki's 8-year-rule is all but over, even as Maliki shows no sign of relinquishing power.
"They're treating him like he's the prime minister already," Michael Knights, a Boston-based fellow and Iraq scholar at the Washington Institute, said of Abadi.
"Now the U.S. can press on with its offer of enhanced security cooperation with Iraq."
Maliki, a Shi'ite Muslim Islamist blamed by Washington for driving the alienated Sunni minority into a revolt that is fueling the Islamic State's brutal insurgency, deployed militias and special forces on the streets on Monday in a potentially dangerous political showdown.
Obama urged Abadi to quickly form a new cabinet that represents Iraq's different ethnic and religious communities. "This new Iraqi leadership has a difficult task," Obama said. "It has to regain the confidence of its citizens by governing inclusively and by taking steps to demonstrate its resolve."
Abadi, a deputy speaker and veteran of Maliki's Dawa Party, was named by President Fouad Masoum on Monday to replace Maliki.
"PARTNER IN BAGHDAD"
Obama's comments underline what one former U.S. official described as a potential "sea change" in Washington's ties with Baghdad if Abadi forms a government following increasing U.S. disenchantment with Maliki, who Washington backed as prime minister in 2006 when a Sunni insurgency raged and again in 2010 for a second term.
"The U.S. will finally have a partner in Baghdad," said Wayne White, a scholar at the Middle East Institute in Washington and a former senior State Department intelligence official.
Born in Baghdad in 1952, Abadi was a trained electrical engineer before entering Iraq's government after the U.S.-led invasion in 2003. He was part of the political opposition to late dictator Saddam Hussein's Baathist regime and lived in Britain for many years. Two of his siblings were executed in 1982 for their membership in the then-outlawed Dawa party.
James Jeffrey, who served as the U.S. ambassador to Iraq from 2010 to 2012, said he had met Abadi in Baghdad and believed he was "someone the United States could work with."
He said that Abadi's main strength was that "he's not Maliki" and has not alienated groups across the Iraqi political spectrum. He predicted that Maliki would resist but not be able to hold onto power. Too many forces inside Iraq, including the country's Shia establishment in the city of Najaf, have turned against Maliki, he added.
Jeffrey said that while some Iraqi army units remain personally loyal to Maliki, the presence of 600 American advisers make it difficult for Maliki to get all of Iraq's security forces to act on his behalf.
"He's really trapped."
A U.S. official said that to his knowledge the United States had not played a role in the selection of Abadi.
"We were sufficiently burned by the interference and choice of Maliki that people around here are not into king-making," said the official, who spoke on condition of anonymity. "In this case, he was pretty much chosen by the (Iraqi) process and everybody is pretty relieved that they have chosen somebody and that it was not Maliki."
Obama late last week authorized air strikes in Iraq to protect U.S. personnel in Arbil from the Islamic State, a Sunni fundamentalist militant group that has swept through northern Iraq, and to ensure that members of the Yazidi sect were not subject to systematic violence at the hands of the militants.
The air strikes carried out so far are the first direct U.S. military action in Iraq since the Obama administration completed its withdrawal of U.S. troops at the end of 2011. (Additional reporting by Missy Ryan, Rebecca Elliott and Arshad Mohammed in Washington, and David Rohde in New York. Editing by Jason Szep and Richard Chang)
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