An Iraqi militant group has threatened to target lawmakers who approve a bill intended to regulate Iraq's oil and gas industry.

The 1920 Revolution brigades said in a statement posted on a Web site used by insurgents that the proposed oil law was a vehicle for the US to steal Iraq's oil wealth.

'We warn all those who have a role in approving this law, which represents a danger to our future, ... they will not escape the punishment of the mujahideen,' the statement said.

The US has been pressing Iraq's leaders to speed up passage of the oil law and other measures that it views as crucial to spurring national reconciliation and ending sectarian violence.

'The occupation is stumbling ... after deadly strikes from the mujahideen so (the US) is seeking to expedite the looting of our wealth through legalising international theft by prompting its (Iraqi) government (and) the puppet parliament to approve the so-called oil law,' the group said.

'We will, using all available means, try to prevent the theft of our wealth through all possible channels.'

Iraq sits on the world's third-largest oil reserves, but a law regulating how the income will be shared by its sectarian and ethnic groups is vital to attracting the foreign investment that it needs to raise output and rebuild its economy.

The draft was approved by the cabinet in February but has faced stiff opposition since then from the Kurds, who felt they were getting a bad deal. Most of the oil reserves are in the Kurdish north and the Shi'ite south.

The 1920 Revolution brigades, which use an Islamic and nationalist banner, are believed to seek to establish an Islamic state in Iraq.

The group has claimed responsibility for attacks on US forces, including the downing of two helicopters in 2004, but appears to steer clear of sectarian violence. Reuters