Iraqi Prime Minister Haider al-Abadi ordered a 24-hour suspension to military operations against Kurdish forces in northern Iraq, to allow for the peaceful deployment of Iraqi troops at the border crossings with the Kurdistan region.
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A Kurdish spokesman earlier said the two sides reached an agreement on Friday to stop fighting which broke out on October 16, after Iraqi forces seized the oil-city of Kirkuk.
Abadi ordered the offensive on Kirkuk and other Kurdish-held territory in retaliation to the September 25 vote for independence in a referendum organised by the Kurdistan Regional Government – a drive that was all but crushed by the surprise attack.
The 24-hour truce "should allow a joint technical committee ... to work on the deployment of federal Iraqi forces in all disputed areas, including Fish-Khabur, and the international border," Abadi said in a statement.
He wants to take control of border crossings with neighbouring countries, including one in the Fish-Khabur area through which an oil export pipeline crosses into Turkey, carrying Iraqi and Kurdish crude oil.
The KRG on Wednesday proposed an immediate cease-fire, a suspension of the referendum result and "starting an open dialogue with the federal government based on the Iraqi constitution" – a call rejected by Baghdad.
According to the KRG, which is based in the Kurdish autonomous region's capital of Erbil, the cease-fire entered effect at 1 A.M. on Friday.
"The cease-fire is holding," Vahal Ali, the director of KRG President Masoud Barzani's media office, told Reuters. "Diplomatic efforts are underway to set a date for talks to start between Erbil and Baghdad."
U.S. Secretary of State Rex Tillerson has also urged dialogue to start, in a call to Abadi, the Iraqi central government said in a statement on Friday morning.
U.S.-backed Iraqi government forces, Iranian-backed paramilitaries and Kurdish fighters fought alongside each other to defeat Islamic State, but the alliance has faltered with the militants largely defeated in the country.