A solution to the Isis-led insurgency in Iraq appeared to slip away after a parliament session aimed at kickstarting the formation of a government was postponed when MPs failed to agree on a new speaker.

Politicians in Baghdad were reportedly bickering despite calls for unity to see off the jihadist offensive that has overrun swaths of the country. The Iraqi security forces have struggled to repel the swift advance of fighters for the Islamic State in Iraq and the Levant, which has forced hundreds of thousands of people to flee their homes.

The developments have also alarmed the international community and heaped pressure on Nouri al-Maliki, the prime minister, as he tries to form a government and a third term in office.

But the government formation process – which international leaders and top clerics have urged should be completed as quickly as possible – suffered a setback when the session set for Tuesday was postponed to 12 August because political leaders could not reach an agreement.

More than two months after Maliki's camp won the most seats in the elections, though not a majority, parliament has yet to begin the process of choosing the country's top three positions, which according to an unofficial deal are split between the Shia, Sunni and Kurdish communities.

A session last week ended in chaos, with MPs trading heckles and threats before some of them walked out, with the UN's special envoy warning that further delays risked plunging the country into a "Syria-like chaos".

Iraqi forces have largely regrouped after soldiers abandoned their positions and, in some cases, even weapons and uniforms as militants conquered the city of Mosul and advanced to within 50 miles of Baghdad.

Thousands of Iraqis flee violence and bloodshed in Mosul, Tal Afar, and surrounding communities. Photograph: David Honl/ David Honl/ZUMA Press/Corbis

But while Iraq has received equipment, intelligence and help on the ground from the US, Russia, Iran and even Shia militias it once shunned, government efforts to push back were dealt a blow by the killing of a senior general on Monday.

Major General Najm Abdullah al-Sudani, the commander of the army's 6th division, "was killed by hostile shelling in Ibrahim bin Ali", a military spokesman told AFP.

Ibrahim bin Ali is within 16 miles of Baghdad and is near where Iraqi security forces have been locked in a months-long standoff with militants who seized control of the city of Falluja.

Security forces have also tried to wrest back the Sunni stronghold of Tikrit from a loose alliance of Isis fighters, other jihadist groups and former Saddam Hussein loyalists. Iraqi forces have been hamstrung by a lack of combat experience and dearth of intelligence in Sunni areas, owing largely to distrust of the Shia-led authorities among minority Sunni Arabs, analysts say.

"The army and the police are seen as sectarian … and therefore the Sunni community doesn't provide support or, crucially, intelligence to the security forces," said John Drake, of the security firm AKE Group. "If you don't have good intelligence on the ground, your strikes are not precise, they involve collateral damage and casualties … making everything worse."

While most observers have argued Baghdad was not about to fall, violence and suicide bombings have continued.

The latest was said to have struck a cafe in a predominantly Shia area in western Baghdad on Sunday, killing at least four people and wounding a further 12.

An Isis-linked Twitter account posted a picture purported to be of the suicide bomber, apparently a Lebanese national, posing in front of the black Islamic flag, holding a sword and surrounded by assault rifles and rocket launchers.

The authenticity of the image could not immediately be verified.

And while government forces were still looking for a major victory, Isis jihadists appeared to be brimming with confidence.

A few days after declaring the establishment of a caliphate, the group's leader Abu Bakr al-Baghdadi delivered a Friday sermon in Mosul's largest mosque.

Analysts have described the sudden public appearance by the self-proclaimed "caliph" – second on the US most wanted list – as a daring stunt, reinforcing Baghdadi's status as the new strongman in the world of global jihad.