The party that won the most seats in Iraq's March election has suspended talks on forming a coalition, five months after the inconclusive vote.
The al-Iraqiya bloc was negotiating with the second-placed Shia-led bloc of Prime Minister Nouri al-Maliki.
But it has been angered by a TV interview in which Mr Maliki said that it represented the Sunnis of Iraq.
Al-Iraqiya, which says it is non-sectarian, wants a televised apology from Mr Maliki before talks can resume.
As the US plans the imminent withdrawal of its combat troops, correspondents say there is little tangible progress in the formation of an Iraqi government.
The latest dispute comes after Mr Maliki called al-Iraqiya a "Sunni bloc" during a television interview with the US-funded al-Hurra TV channel.
"We demand that [Mr Maliki] apologises, not to Iraqiya but to the supporters of Iraqiya who voted for a national project and not a sectarian one," said spokesman Maysoon al-Damaluji.
Iraq has no new government five months after parliamentary elections in March.
The political deadlock is caused mainly by Mr Maliki not being willing to give way in favour of Iyad Allawi, whose al-Iraqiya bloc won two more seats than Mr Maliki's State of Law.
But neither has an overall majority, so even if Mr Maliki stands down, there will have to be agreement eventually between them, or with others, to form a coalition.
Iraqiya won the poll with 91 seats in the 325-member Council of Representatives, while State of Law finished with 89.