Iraqi troops drive toward positions occupied by Kurdish forces on Saturday near Kirkuk, Iraq. (Ahmad Al-Rubaye/AFP/Getty Images)

Clashes broke out early Monday in northern Iraq as Iraqi forces moved to recapture Kurdish-held oil fields and a military base near the city of Kirkuk, setting the stage for a battle between two U.S. allies.

After a three-day standoff, Iraqi forces advanced into the contested province with the goal of returning to positions they held before 2014, when they fled in the face of an Islamic State push. The positions have since been taken over by Kurdish troops.

The conflict between Kurdi­stan and the Iraqi government over land and oil is decades old, but a Kurdish referendum for independence last month inflamed the tensions. The Iraqi government, as well as the United States, Turkey and Iran all opposed the vote.

The flare-up presents an awkward dilemma for the United States, which has trained and equipped the advancing Iraqi troops, which include elite counterterrorism forces, and the Kurdish peshmerga on the other side.

But the Iraqi side is also backed up by Shiite militia forces close to Iran, at a time when the Trump administration has been vocal about curbing Iranian influence in the region, having sanctioned Iran’s Islamic Revolutionary Guard Corps last week.

Iraqi forces said they were under instructions to avoid violence, but Kirkuk residents said that gunfire and explosions could be heard in the city in the early hours of the morning. Kurdish media reported that thousands of Kurdish volunteer fighters had rushed to take up arms.

Iraqi Prime Minister Haider al-Abadi had ordered his forces to “protect all citizens” as they retake positions, state television reported.

Kurdish forces took full control of the ethnically and religiously mixed city of Kirkuk after the Iraqi military fled from large swaths of northern Iraq in 2014 in the face of an Islamic State push. It also seized oil fields formerly run by Baghdad that pump hundreds of thousands of barrels of oil per day. Now Iraq wants that ground back.

Army, police and forces from Iraq’s popular mobilization units, which include the Iran-backed militias, have massed in the area, as Kurdish forces furiously dug defenses. Humvees and firing positions protected by sandbags were stationed on the main highway from Baghdad to Kirkuk. Bulldozers dragged earth to the road to build blockades to stop armored convoys from advancing. Bridges were blocked.

As Kurdish authorities warned they were about attack, Abadi tried to defuse tension, taking to Twitter to assure that Iraqi forces “cannot and will not attack our citizens.” Iraqi commanders initially dismissed troop movements as routine deployments aimed at securing nearby Hawija, recently recaptured from Islamic State militants.

But Shiite militia leaders close to Iran said that they were there to move into the province and had presented a list of demands to Kurdish Peshmerga commanders.

Those demands included a Kurdish withdrawal from positions including the city’s K1-military base and oil fields.

“The orders are to surround K1 and oil fields and stop and call on the Kurdish forces to retreat,” said a counterterrorism officer who declined to be named because of the sensitivity of the topic. “There are strict orders to avoid violence.” But militia commanders took a more combative tone. Anyone who fights Iraqi forces is “the same as ISIS,” said Karim al-Nuri, a spokesman for Iraq’s mobilization units. State television said that counterterrorism forces, the 9th Division of the Iraqi army and federal police forces had taken “large areas” of the province without a fight. It said popular mobilization units took positions “outside Kirkuk.”

Earlier in the day Col. Ryan Dillon, a U.S. military spokesman in Baghdad had described the situation as “stable” but said the “heightened tension” was distracting from the fight against Islamic State militants.

After recapturing the city of Hawija, Iraqi forces were supposed to deploy to the borders with Syria to stamp out the last pockets controlled by Islamic State militants.

The confrontation with Baghdad has also brought out splits among the Kurds. Earlier in the day, senior Kurdish officials from its two main parties met in the town of Dukan to discuss how to proceed in negotiations with Baghdad. The Patriotic Union of Kurdistan, or PUK, which has closer ties to Iran and Baghdad, has been more open to agreeing to a deal for Baghdad to enter key sites, in contrast to the ruling Kurdistan Democratic Party.

Given the financial sanctions announced against the IRGC, “it’s comical really,” said a Kurdish official who declined to be named when criticizing an ally. “If you want to push back Iranian influence, don’t stay quiet. In the Middle East silence is taken as a sign of weakness.”

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