Iraq's foreign minister said on Saturday that it was "not possible" to impose economic sanctions on Syria, after the Iraqi president said he was concerned extremists might take over.

Thousands of people have been killed since March as Syrian President Bashar al-Assad's regime has tried to suppress a popular uprising, but Iraq has so far opposed punitive measures.

"It is not possible, in the opinion of Iraq, to impose economic sanctions on Syria," Hoshyar Zebari told a news conference in the Iraqi shrine city of Najaf.

"We announce our reservation on this issue," he said, although it was not immediately clear if he meant that Iraq would refuse to enforce a proposed package of Arab sanctions, which was to be discussed by finance ministers on Saturday and foreign ministers on Sunday.

An Arab League deadline for Damascus to accept observers or face sanctions passed on Friday without a response from a defiant Syria.

President Jalal Talabani said Iraq was afraid extremists might take over in Syria if Assad's regime falls, according to a Saturday statement on the presidential website.

"We are worried about the alternative... we are afraid of the extremist party, if it replaces the old," Talabani said in an interview with Iraqiya television, according to the statement.

"We are afraid that if extremist forces come to power, they would be hostile to democracy, and hostile to Iraq.

"We support the peaceful political work for democracy and a civil constitutional government in Syria. We support the work for the reforms that the Syrian people want," he said.

But Talabani said that Iraq was opposed to foreign military intervention in Syria.

"We are against armed Western intervention in (Syria's) internal affairs," Talabani said, adding that the same applied to intervention by Turkish forces.

NATO-led air strikes in support of Libyan rebels were key to the overthrow of long-time dictator Moamer Kadhafi's regime. A rebel Free Syrian Army has been formed to oppose Assad's rule.

"It is important to be against dictatorship in any Arab country, and we support the right of the Arab people to democracy and parliamentary life, party life and the freedom of press, but ... we are against the external military intervention," Talabani said.

Iraq was the only country to abstain from a November 12 vote to suspend Syria from the Arab League. Lebanon, Yemen and Syria voted against.

Baghdad has had tense relations with Damascus in the past, but analysts have attributed its recent backing for Syria to confessional motivations, and fears that unrest there will spill over into Iraq.

Iraq now has a Shiite-led government, but was ruled by members of the country's Sunni minority for most of its history. Syria is ruled by minority Alawites, an offshoot of Shiite Islam, while protesters demanding reforms are largely from its Sunni majority.