At a news conference after meetings with senior Iraqi leaders, Talabani said he hoped Iraq's new cabinet would be finalised by Thursday.
He also said 50 bodies, believed to be those of Shia hostages seized in a town near Baghdad on Saturday, had been found in the Tigris River south of the capital.
A new democratically elected government in power could ease Iraqis' widespread frustration about the weeks of horse-trading even as insurgency has revived.
"We want to announce it (the new government) as soon as possible," Talabani told reporters after meeting Prime Minister Ibrahim Jaafari, former interim prime minister Iyad Allawi and Abdul Aziz al-Hakim, leader of SCIRI.
"We are hoping it will happen tomorrow afternoon," he said.
Iraqi leaders have been negotiating over the cabinet since January's elections that brought a Shia majority to power.
But disagreements over distribution of ministries and on how the Sunni minority should be brought into the political process have held up the formation of the government.
The delay has created a climate of indecision, officials say, and let momentum against the insurgency built up by the elections to slip away.
Much of the squabbling has focused on the oil, interior and defence ministries. The interior ministry, responsible for internal security, is expected to go to a member of SCIRI, the main party in the Shia alliance.
In other violence, insurgents shot dead 19 National Guardsmen in a soccer stadium in Haditha, about 200-km north-west of Baghdad, after they took them prisoner, witnesses said.
The killings of the National Guards in Haditha followed clashes in the area between National Guards, US troops and insurgents.
Three other car bombings in Baghdad killed at least two Iraqi civilians and wounded eight. And two car bombs struck the entrance of a US and National Guard base in Ramadi, a hotbed of resistance about 100 kilometres west of Baghdad.