Iraq's highest court paves way for Maliki to serve third term

BAGHDAD (Reuters) - Iraq's highest court ruled on Monday that Shi'ite Prime Minister Nuri al-Maliki's bloc is the biggest in parliament, meaning he could retain his position, state television reported. The president, according to the constitution, must now ask Maliki to form a new government in Iraq, which is facing a major challenge from Islamic State Sunni insurgents and widepread sectarian bloodshed. Maliki, serving in a caretaker capacity since an inconclusive election in April, has defied calls from Sunnis, Kurds, some fellow Shi'ites and regional power broker Iran to step aside to make room for a less polarizing figure. (Reporting by Ahmed Rasheed; Writing by Michael Georgy; Editing by Louise Ireland)