Iraqiya won last year's parliamentary election but was unable to form the political majority needed to take control of the government leaving room for Iraqi Prime Minister Nouri al-Maliki to secure a second term in office.
Maliki hasn't been able to fill his Cabinet, however, amid political bickering among rival factions in the government.
Iraqiya announced it was standing on the sidelines until Maliki's State of Law coalition met a series of demands.
Iraqiya in its demands called for an end to "security violations" in the country, partnerships in security and human rights and the approval of the Sunni-backed slate's list for top defense positions, the Voices of Iraq new agency reports.
Iraqi satellite news agency al-Sumaria reports that State of Law wants to scale back the size of the government to alleviate redundancies. The current government frame calls for three vice presidents and three deputy prime ministers.
Apart from political deadlocks, Iraq is preparing for the withdrawal of U.S. forces at the end of the year.