After a late-night session the 275-member parliament voted to approve a fresh deadline of August 22 to prepare the charter.
“We weren’t able despite all efforts to reach solutions that would satisfy everyone,” parliament speaker Hajm al-Hasani said.
Iraq’s leaders had battled for the past two weeks to finalise a charter that aimed to set the country on a new political course.
“Huge efforts were exerted, and principle issues have been settled, but this crucial project needs closer examination, and therefore, more time,” President Jalal Talabani said.
The session included Shiite leaders Prime Minister Jaafari, former premier Iyad Allawi and prominent Shiite religious politician Abdel Aziz al-Hakim –and two Kurds – President Talabani and the president of the Kurdish autonomous region, Massoud Barzani.
A constitution was due to be drafted by August 15 and then put to a referendum in mid-October ahead of new elections in December.
Prime Minister Jaafari downplayed a possible political crisis after the failure to meet the deadline.
He said the main issues that were unresolved were federalism and distribution of national wealth.
Shiite calls for Islam to have a bigger role in Iraqi law have also been a source of friction.
Kurdish MPs blamed the Sunni Arabs for missing the deadline.
“The Sunni Arabs are way apart on the issue of federalism… I doubt if they would come on board even during the next one week,” Kurdish MP Mahmud Othman said.
“But next time I think the MPs will approve the draft without the Sunnis.”
Sunni Arabs fear a federal structure involving a number of autonomous governments could leave them without a share of vast oil reserves, which lie largely in the Kurdish north and the Shiite south.
An initial agreement to share oil revenues has been agreed, but the mechanism to distribute it remains unresolved.
Sunni member Saleh al-Motlag said last week that oil revenues would be controlled by the central government and distributed on the basis of provincial populations.
The delay is a blow to US hopes that a timely agreement could help undermine the insurgency.
At least 17 people died in violence on Monday, including two bodyguards of Vice President Adel Abdel Mehdi who were killed in a bomb attack north of Baghdad.