Iraqi federal troops have seized several parts of the disputed Kurdish-controlled province of Kirkuk after Iraqi Kurds voted for independence in a referendum late last month.
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The Iraqi army's Joint Operations Command said it took control of a military base and other areas in the oil-rich province, located 155 miles north of Baghdad.
Iraqi Kurdish officials said early Monday that federal forces and state-backed militias have launched a "major, multi-pronged" attack aimed at retaking the disputed city.
According to a source in the Kirkuk migration department, thousands of Iraqis are fleeing the city of Kirkuk and heading toward the northern cities of Sulaimaniya and Erbil to escape the fighting.
The territory captured includes a key airbase called K1, the North Gas Company station, a nearby processing plant, a power plant and the industrial district, an Iraqi military statement said.
Maj. Gen. Ayoub Yusuf Said of the Iraqi Kurds told The Associated Press: "We are not withdrawing from here, we are fortifying our positions at the airport and we intend to fight here."
The Kurdish forces, known as peshmerga, were digging in at the edge of the international airport after withdrawing from their positions outside the city following an attack by Iraqi troops.
The Kurdistan Region Security Council said that the peshmerga have destroyed at least five U.S.-supplied Humvees being used by the state-sanctioned militias following the "unprovoked attack" south of the city.
Brig. Gen. Bahzad Ahmed, a spokesman for Kurdish forces, said Monday the Iraqi troops have "burnt lots of houses and killed many people" in Toz Khormato and Daquq, south of the disputed city. He said Kurdish forces, known as peshmerga, have "destroyed one or two of their tanks."
His claims could not be independently verified.
Tensions have soared since the Kurds held a non-binding referendum last month in which they voted for independence from Iraq. The central government, along with neighboring Turkey and Iran, rejected the vote.
The United States has supplied and trained Iraqi federal forces and the peshmerga, both of which are fighting the Islamic State group. The U.S. also opposed the referendum, and has urged both sides to remain focused on defeating the extremists.
The central government and the autonomous Kurdish region in the north have long been divided over oil revenues and the fate of disputed territories like Kirkuk that are controlled by Kurdish forces but are outside their self-ruled region.
The Kurds assumed control of Kirkuk, in the heart of a major oil-producing region, in the summer of 2014, when IS militants swept across northern Iraq and the country's armed forces crumbled. Baghdad has demanded the Kurds withdraw.
State-run Al-Iraqiya TV had earlier reported that federal forces rolled into parts of the countryside outside Kirkuk without facing resistance. However, some residents of the city and an Iraqi militia commander reported shelling.
Al-Iraqiya carried a statement from Prime Minister Haider al-Abadi's office saying he had ordered federal forces to "impose security in the city in cooperation with the inhabitants and the peshmerga," indicating he was willing to share administration.
A commander of the local Kurdish police force said his forces remained in control of the province's disputed oil wells. "There's been no agreement to hand over the wells until now. As for the future, I don't know," said Bahja Ahmad Amin.
Inside Kirkuk, a multi-ethnic city that is home to more than 1 million people, residents shuttered themselves in homes and reported hearing sporadic booms they said sounded like shelling and rocket fire.
Iraq's state-sanctioned militias, the mostly Shiite Arab Popular Mobilization Forces, were ordered to stay out of the city, according to al-Abadi's office, and instead keep positions in the countryside. They are viewed with deep suspicion by Kurdish residents, who see them as beholden to Iran rather than Iraq's central government. The predominantly Shiite militias are sponsored and guided by Tehran.
Baghdad has been turning the screws on the Kurdish region since the September referendum, pushing Kurd leaders to disavow the vote and accept shared administration over Kirkuk.
Iraq's government barred international flights to and from the region and asked neighboring Turkey and Iran to close their borders. Iran closed its three official crossings with the Kurdish region Sunday, Kurdish media reported. It also froze currency transfers to four banks operating in the Kurdish region.
Al-Abadi has demanded shared administration over Kirkuk. His Cabinet said Sunday that fighters from Turkey's Kurdish insurgency, the PKK, were beginning to appear in Kirkuk, and declared that would be tantamount to an act of war.