* Imam gave medical care to govt-backed "Sahwa" militia
* Attack occurs day before start of Eid festivities
BAGHDAD, Sept 9 (Reuters) - Gunmen stormed the house of a Sunni cleric on Thursday and cut his head off before setting him alight in an attack that bore the hallmark of insurgents, a police spokesman said.
Jabbar Saleh al-Jibouri was killed shortly before dawn at his house in a village near Muqdadiya town, 80 km (50 miles) northeast of the capital in Diyala province, Major Ghalib al-Jubouri, a police spokesman in Diyala, said. The attack came a day before the start of the Islamic holiday of Eid.
"The gunmen entered the house, stabbed him, cut his head off and set him alight," Jubouri told Reuters.
"Most probably the attack was based on terrorist motives because it happened in such a horrible way."
An investigating officer, who did not want to be named, said Jibouri, who was also a medic, used to treat members of the government-backed "Sahwa" militia.
Insurgents have frequently targeted the Sahwa, Sunni ex-militants who turned against al Qaeda. The U.S. military credits the Sahwa group with helping turn the tide of sectarian violence unleashed by the U.S.-led invasion of Iraq.
Jibouri, who was a relative of a senior member of the Iraqi Islamic Party, returned with his family to the mainly Sunni neighbourhood three months ago after being displaced in 2007 by al Qaeda during the height of sectarian violence.
Diyala is a mixed province with a Sunni majority located just north of Baghdad. Jubouri said the imam's neighbourhood was marked by Iraqi police as one in which sleeper cells operated.
Militants are believed to be trying to exploit a political vacuum that followed Iraq's inconclusive election in March. More than six months later, Shi'ite, Sunni and Kurdish political factions remain in dispute over the formation of a government.
Attacks are on the rise against the Iraqi army and police, who have taken over responsibility for security in Iraq after the United States formally ended its combat mission last week.
(Reporting by Khalid al-Ansary; Editing by Serena Chaudhry and Elizabeth Fullerton)
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