Baghdad, Iraq ? Direct elections in Iraq require extensive preparation, including better polling infrastructure and reliable law and order, and cannot take place before the end of the year or perhaps until early 2005, according to a United Nations report issued Monday.

The report, compiled by a U.N. survey team headed by envoy Lakhdar Brahimi, will likely frustrate leaders of the majority Shiite Muslim community who have called for direct elections before the transfer of sovereignty at the end of June.

The report also undercuts a U.S. proposal that Iraq form a transitional government through regional caucuses. According to the United Nations, the caucus plan would be vulnerable to manipulation and would have little credibility with Iraqis.

Carina Perelli, a U.N. election administrator, told reporters in New York she believed that, if work began immediately, it would take at least eight months to prepare direct elections — and only then if all the conditions for security were met and a legal framework put in place.

The U.N. team found Iraq lacking basic electoral law, reliable voter rolls and, under the current security climate, assurances that people could travel freely and safely to the polls.

The report did not derail the handover of sovereignty — a timetable to end American occupation that Iraqi leaders and the Bush administration were eager to keep.

But the report made no recommendation on how Iraq, before direct elections, could select a provisional government or how sovereignty would be transferred to Iraq without an elected government of any sort.

The current Iraqi Governing Council was appointed by the U.S.-led occupation authority and is trying to write a law that would outline an election procedure. That so-called basic law was to be written by the end of this month, but after the last few weeks of uncertainty, it is unclear when the law will be finished.

Last week, one of the most influential Shiite clerics, Grand Ayatollah Ali al-Sistani, appeared to have grudgingly agreed to a delay in direct elections until after sovereignty was handed over. But as details of the U.N. report became known in Iraq, there was no word on al-Sistani’s reaction to a delay of many months beyond the handover date.