The Iraqi army on Friday launched an operation to retake Kurdish-held positions around the northern city of Kirkuk as Kurdish authorities sent thousands more troops to the disputed oil region over what they said were "threats" from the central government.
"Iraqi armed force are advancing to retake their military positions that were taken over during the events of June 2014," a general told AFP by telephone, asking not to be identified.
He said that federal troops had already taken one base west of Kirkuk on Friday morning after Kurdish peshmerga fighters withdrew during the night without a fight.
His comments came despite Iraqi Prime Minister Haider al-Abadi ruling out the use of military force against the Kurds.
Ethnically divided but historically Kurdish-majority Kirkuk is one of several regions that the Peshmerga fighters took over from the Iraqi army in 2014 when ISIS militants swept through much of northern and western Iraq.
But Baghdad is bitterly opposed to Kurdish ambitions to incorporate the oil-rich province in its autonomous region in the north and has voiced determination to take it back. The dispute on the issue has escalated since the Kurds voted for independence in a non-binding referendum last month.
The vice president of the autonomous Kurdistan region, Kosrat Rasul, said "tens of thousands of Kurdish Peshmerga and security forces are already stationed in and around Kirkuk.
"At least 6,000 additional Peshmerga were deployed since Thursday night to face the Iraqi forces' threat," he told Kurdish TV channel Rudaw.
The Kurds reiterated on Friday their call for negotiations following the referendum.
But a top aide to Iraqi Kurdish leader Massud Barzani vowed that Peshmerga forces would defend their positions in case of an Iraqi military move.
"Thousands of heavily armed Peshmerga units are now completely in their positions around Kirkuk," Hemin Hawrami said.
"Their order is to defend at any cost."
The orders came after the Kurdish authorities accused the Iraqi government of massing forces in readiness for an offensive to seize Kurdish-held oil fields.