BAGHDAD  Iraq’s political crisis deepened on Wednesday after an appeals court overturned a ban on hundreds of candidates in next month’s election for having ties to Saddam Hussein’s Baath Party, and Prime Minister Nuri Kamal al-Maliki then disputed that ruling.

The ban had prompted threats of election boycotts and warnings that the credibility of the election itself was at stake if political groups, particularly Sunnis, felt disenfranchised. And it stoked fears of renewed violence as American troops were beginning to withdraw.

The court also said it would reconsider the ban after the March 7 election, raising the possibility of further political turmoil by ousting elected members of Parliament should their ties with the Baath Party be established. The initial effort to knock more than 500 candidates off the ballot  both Sunnis and Shiites, but mostly those viewed as rivals to Mr. Maliki’s bloc  created a political furor and deeply alarmed American and United Nations officials.

The ruling by a panel of seven judges appeared at first to be an exercise of judicial independence in a still young democracy. It followed weeks of behind-the-scenes negotiations and diplomacy, especially from the Obama administration, which sent Vice President Joseph R. Biden Jr. to Iraq in the midst of the turmoil.