Iraqi forces, Kurdish Peshmerga agree on ceasefire, Kurdistan says

By Maher Chmaytelli BAGHDAD (Reuters) - Iraqi forces and Kurdish Peshmerga fighters reached an agreement on Friday to stop fighting in northern Iraq, the Kurdistan Regional Government (KRG) said, although the status of any ceasefire remained unclear. A spokesman in Baghdad for the U.S.-led coalition against Islamic State earlier said the deal covered all fronts in the conflict, which broke out after Kurdish authorities held an independence referendum last month in areas of northern Iraq. However, he later told Reuters that the truce had not been officially agreed, while an Iraqi military spokesman declined to comment. According to the KRG, which is based in the Kurdish autonomous region's capital of Erbil, the ceasefire entered effect at 1 am on Friday (2200 GMT Thursday). "The ceasefire 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 called Iraqi Prime Minister Haider al-Abadi urging for dialogue to start, the Iraqi central government said in a statement. Iraqi government forces, Iranian-backed militias and Kurdish troops fought alongside each other to defeat Islamic State, also called ISIS, but the alliance has faltered with the militants largely defeated in the country. Iraqi government forces and the Tehran-backed Popular Mobilisation launched a surprise offensive on Oct. 16 in retaliation to the Sept. 25 independence referendum organized by the KRG. The offensive aims to capture disputed territories, claimed by both the KRG and the Iraqi central government, as well as border crossings and oil facilities. The city of Kirkuk, which lies in an oil producing area, fell to Iraqi forces without much resistance on Oct. 16 but the Peshmerga began to fight back as they withdrew closer to the Kurdish autonomous region. The most violent clashes happened in the northwestern corner where Peshmerga are defending land crossings to Turkey and Syria and an oil hub that controls KRG crude exports, located in the region of Fish-Khabur. Speaking in Geneva on Thursday, Tillerson said he was "disappointed that the parties have been unable to reach an entirely peaceful resolution" and that he had encouraged Abadi to accept the KRG "overtures for talks on the basis of the Iraqi constitution". "Both parties are talking with one another, but it is not an official ceasefire," U.S. Colonel Ryan Dillon, the spokesman of the U.S.-led coalition in Baghdad, told Reuters, correcting an earlier statement in which he said a ceasefire had been agreed, In an interview with Kurdish TV Rudaw, Dillon called on the two sides to extend the deal to a complete halt in hostility and "refocus our efforts on defeating ISIS". "We are encouraging dialogue, we are trying to get the tensions down," he added. Abadi demanded on Thursday that the Kurds declare their referendum void, rejecting the KRG offer to suspend its independence push to resolve a crisis through talks. "We won't accept anything but its cancellation and the respect of the Constitution," he said in a statement during a visit to Tehran. The KRG proposed on Wednesday an immediate ceasefire, a suspension of the referendum result and "starting an open dialogue with the federal government based on the Iraqi Constitution". The fall of Kirkuk was a major blow to the Kurdish drive for independence championed by Barzani, as it halved the region's oil export revenue. (Reporting by Maher Chmaytelli; Editing by Peter Graff, Alison Williams and David Stamp)