The decision was announced one day after a massive car bomb killed 70 people in Baquba.
The conference had been scheduled to begin Saturday and was postponed until mid-August, conference organizer Abdul Halim al-Ruhaimi told the Associated Press.
Severe difficulties had plagued those organizing the meeting. Key political groups had vowed to boycott the conference and leaders in ethnically diverse areas were unable to agree on their delegates.
Both the Muslim Clerics' Association, a mainstream Sunni Muslim religious group, and another key Sunni party, the Iraqi Islamic Party, had said they would not participate in the meeting.
Iraqi media had reported that less than half of Iraq's 18 provinces had chosen their delegates just days before the conference was to begin.
The United Nations had repeatedly called on the organizers to delay the conference for up to one month to encourage wider participation and ensure it was properly prepared.
"Everybody is very much aware that the conference should take place in the best possible conditions, that it should be as inclusive as possible and that it should generate substantive debate on the country's future," Jamal Benomar, a U.N. representative in Iraq, told Reuters before the delay was announced.
"The time is very short to organize such a big undertaking, and that is why the United Nations favors putting it off," he continued.
Benomar told Reuters that in the past week he had met dozens of Iraqi groups who feel ostracized from the political process.
The three-day conference was to be held by the end of July under a law enacted last month by the departing U.S. civil administration.
Even before Wednesday's bombing, organizers had worried the gathering would be a target for terror groups and had kept its location and security plans secret. But al-Ruhaimi denied those fears played any role in the decision to delay the meeting.
"The security situation has nothing to do with the postponement," he told the AP.
The conference is designed to be a key step on the road to democracy, with delegates choosing who will serve on a 100-member National Council. That body is to serve as a check on the interim government until elections are held in January 2005.
The council will have the power to veto legislation with a two-thirds majority, will approve Iraq's 2005 budget and would appoint a new prime minister or president if either official resigned or died in office.