Iraqi Prime Minister Haider al Abadi has given instructions that the Iraqi flag be hoisted on Kirkuk and other territories that are disputed between the Iraqi government and the Kurdish Regional Government (KRG).
A convoy of elite Iraqi military forces took control of the governorate building in central Kirkuk on Monday, meeting no opposition from the Kurdish Government's Peshmerga forces deployed in the city, security sources and residents said.
Iraq's central government forces launched an advance early on Monday into territory held by the Peshmerga, seizing a swathe of countryside surrounding the oil city of Kirkuk in bold military response to the KRG's vote last month on support for independence.
A dozen Humvees from the US-trained Counter Terrorism Service (CTS) arrived at the governorate building and took position in the vicinity alongside the local city police, they said.
They drove to the centre of the city from airport which they had captured earlier in the day from Kurdish forces.
Iraqi forces removed on Monday the Kurdish flag that was hoisted on the governorate building in April next to an Iraqi flag, said residents, adding that only the Iraqi flag was flying.
Iraqi Prime Minister Haider al Abadi gave instructions that the Iraqi flag be hoisted on Kirkuk and other territories claimed by both the Iraqi government and the KRG.
TRT World's Nicole Johnston has this report.
The government said its troops had captured Kirkuk airport, advanced to the city's gates and taken control of northern Iraq's oil company from the security forces of the semi-autonomous Kurdish region, known as Peshmerga.
The forces have taken several positions south of Kirkuk from Kurdish forces including the North Gas Company station, a nearby processing plant and the industrial district south of the city, an Iraqi military statement said on Monday.
Federal forces are now in control of the North Oil Company and Baba Gurgur fields, it said.
The statement came after Iraqi forces began moving late Sunday towards oil fields and the K1air base held by Peshmerga forces.
Baghdad described the advance as largely unopposed, and called on the Peshmerga to cooperate in keeping the peace.
But the Peshmerga statement cited by KRG leader Masoud Barzani's assistant Hemin Hawrami said Baghdad would be made to pay "a heavy price" for triggering "war" on the Kurdish people.
TRT World’s Nicole Johnston and Hasan Abdullah have more.
"Restore security" in Kirkuk
A spokesman for Iraq's state-sanctioned militias said they have "achieved all our goals" in retaking areas from Peshmerga forces in and around the disputed northern city of Kirkuk.
Federal forces came under fire from "some rebels" after launching the operation early Monday and returned fire, Ahmed al Assadi said.
He said federal forces have been deployed in the area of the K-1 military base, the Kirkuk airport and a number of oil fields and installations.
But he says the state-backed militias, known as the Popular Mobilisation Forces, have not entered the city centre.
"Iraqi forces and Popular Mobilisation are now advancing from Taza, south of Kirkuk, in a major operation,” the KRG Security Council said in a statement around midnight.
“Their intention is to enter the city and take over the K1 air base and oil fields,” all located west of the city, it said.
Iraq's Joint Operations Command (JOC), which groups all pro-government forces, said it was making progress in its operation to "restore security" in Kirkuk.
Central government forces took control of two bridges, two roads and an industrial zone to the southwest of Kirkuk as well as gas facilities, a power station, a refinery and a police station, the JOC said.
The KRG did not initially confirm the Iraqi advances, but Rudaw, a major Kurdish TV station, reported that Peshmerga had left positions south of Kirkuk.
"We call on the Peshmerga forces to serve under the federal authority as part of the Iraqi armed forces," Abadi said in a statement which was read out on television.
He ordered security forces "to impose security in Kirkuk in cooperation with the population of the city and the Peshmerga," the statement said.
For more, TRT World spoke to Ammar Karim and Bradford Univesity professor, Paul Roger.
Fighting south of Kirkuk
Clashes between Iraqi security forces and Peshmerga were reported in the Taza Khurmatu town south of Kirkuk on Monday.
Iraqi and Kurdish forces exchanged artillery fire south of the city of Kirkuk, Peshmerga officers said.
Iraqi military sources also reported exchange of Katyusha rocket fire to the south of the capital of the Kirkuk province.
Speaking to Anadolu Agency, Peshmerga commander Salar Teymur said the Iraqi forces and Hashd al Shaabi militia opened fire at their positions.
The Peshmerga responded to the fire by the Iraqi forces, Teymur said.
The clashes between the two sides continue, he added.
"Lots of casualties"
An Iraqi Kurdish commander says federal forces have seized an oil and gas company and other industrial areas south of Kirkuk in fighting with Kurdish forces that caused "lots of casualties."
Brigadier General Bahzad Ahmed, a spokesman for Kurdish forces, said on 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 Peshmerga have "destroyed one or two of their tanks."
His claims could not be independently verified.
The KRG Security Council said in a statement that Peshmerga forces destroyed at least five US-supplied Humvees being used by state-sanctioned militias following what it called an "unprovoked attack" south of the city.
Iraq to deploy troops on oil-rich area
Iraq will deploy troops to regain full control of the Kirkuk oil area and fields surrounding it to restart production suspended by the semi-autonomous Kurdish region, a senior Iraqi oil official in Baghdad told Reuters.
KRG has shut down some 350,000 barrels per day (bpd) of production from major fields Bai Hassan and Avana due to security concerns after a flare-up in tensions with the central government, trading sources told Reuters on Monday.
"Kurdish forces following Erbil orders have deliberately evacuated oil workers from oilfields under its control in Kirkuk, including Bai Hassan and Avana and this reckless action caused the halt of production from these oilfields," the official said.
"We will not allow them to shut down production. We've got confirmation from military commanders that it's a matter of a very short time," the official said.
"Our brave forces will regain control of all Kirkuk oilfields and then we will restart production immediately."
One trading source said he was informed by Kurdish operators that civilian workers at both fields were released following a build up of Iraqi military forces around the fields.
The operations were stopped and civilian employees will be able to return and operations will restart only when the intentions of Iraqi security forces are clear, the source added.
He added that the flows of oil from North Oil Co's Kirkuk oil field, which are under control of the central government, were continuing normally at an export rate of 90,000 bpd.
Warning over output flowing
Iraq earlier warned Kurdish officials against shutting down Kirkuk oil flows.
"The oil ministry warned the Kurdish authorities not to attempt any action that would cause crude oil flow disruption from Kirkuk oilfield," a spokesman for North Oil Company told Reuters.
"We received signals from them (Kurdish officials) that they will shut down production operations in Kirkuk oilfield for security reasons but we understand that this is only a pretext to put pressure on Baghdad," the spokesman said.
"This won't work and all options are on the table to continue output flowing. We are coordinating with the central government and oil ministry to ask security forces to intervene and prevent Kurdish crews from mismanaging production operations at the Kirkuk oilfield," the spokesman said.
The Kirkuk oil area produces around 200,000 barrels per day (bpd) out of total Kurdish production of over 600,000 bpd.
The action in Iraq helped spur a jump in world oil prices on Monday.
Turkey stands by Baghdad
Turkey, which had developed a good working relationship with the Iraqi Kurds and let the landlocked region export oil through its pipes, has swung behind Baghdad, furious at a secession bid that might ignite similar demands from its own Kurds.
In a statement, Turkey said it would stand by Baghdad to provide peace and stability, and was ready to work with Iraq's central authorities to end the presence in Iraq of the PKK, designated a terrorist organisation by Turkey, the US and EU.
"Clash in Kirkuk is misunderstanding"
The US-led anti-Daesh coalition said an Iraqi-Kurdish clash in the region of Kirkuk where Iraqi army took control on Monday of Kurdish-held positions was a "misunderstanding" and urged both sides to avoid escalation.
"Coalition forces and advisors are not supporting Government of Iraq or Kurdistan Regional Government activities near Kirkuk, but are aware of reports of a limited exchange of fire during predawn hours of darkness," it said in a statement on its website.
"We believe the engagement this morning was a misunderstanding and not deliberate as two elements attempted to link up under limited visibility conditions," it added.
US urges dialogue
The US-led task international force in Iraq was "closely monitoring (the situation) near Kirkuk; urge all sides to avoid escalatory actions. Finish the fight vs. #ISIS, biggest threat to all," a spokesman said on Twitter.
Bayan Sami Rahman, the KRG's representative in the United States, tweeted a plea for Washington to "use (its) leadership role to prevent war."
The US State Department said on Sunday it was watching developments in the disputed region of Kirkuk and was "very concerned" about reports of clashes.
"We are monitoring the situation in Kirkuk closely and are very concerned by reports of a confrontation," a State Department official said.
"We are engaged with all parties in Iraq to de-escalate tension."
In a statement, the US Defense Department urged both sides "to avoid additional escalatory actions."
The statement said the US, which provided weapons to both the Iraqi army and the Peshmerga to battle against Daesh, opposed destabilising actions that detract from the fight against the terrorist group.
“We continue to support a unified Iraq,” Pentagon spokeswoman Laura Seal said.
“Despite the Kurdish Regional Government’s unfortunate decision to pursue a unilateral referendum, dialogue remains the best option to defuse ongoing tensions and longstanding issues, in accordance with the Iraqi constitution.”
She also called on “all actors” in the region to focus on the common threat of Daesh and avoid stoking tensions among the Iraqi people. Iraqi and Kurdish forces have both been trained and armed by the United States.
"We call on all parties to immediately cease military action and restore calm while we continue to work with officials from the central and regional governments to reduce tensions and avoid and futher clashes," the US embassy said.
Declaration of war
In June 2014, the Kurdish Peshmerga forces took a number of strategic positions in Kirkuk when Daesh swept through northern Iraq and the army collapsed.
Earlier on Sunday, Baghdad accused Kurdish authorities of bringing PKK militants to Kirkuk, and said it considered the move a "declaration of war."
Tension has been on the rise between Erbil and Baghdad since last month when the KRG held a controversial referendum on its independence.
Baghdad demanded Erbil to cancel the outcome of the referendum as a precondition for talks to resolve the dispute. However, Erbil rejected this demand.
The Baghdad central government has taken a series of steps to isolate the semi-autonomous Kurdish region since its vote for independence, including banning international flights.
Baghdad’s tough line, ruling out talks sought by the Kurds unless they renounce the breakaway move, is backed by neighbours Turkey and Iran.
The US has taken the side of the Iraqi government in refusing to recognise the validity of the referendum.