February 25, 2008 | By Gina Chon

KIRKUK, Iraq -- As Turkish troops pursue Kurdish rebels inside Iraq, an ethnic political dispute is heating up in this largely Kurdish town where the country's northern oil industry is based.

Kirkuk is home to ethnic Arabs, Kurds and Turkmen, all of whom lay claim to the area. A referendum scheduled for June to determine whether residents want to become part of Iraq's semiautonomous Kurdish enclave in the north could exacerbate tense relations between the ethnic groups that could possibly turn violent.

Meanwhile, Kurdish, Arab and Turkmen politicians are wrangling over the details of the Kirkuk referendum and the fate of this once-prosperous oil town.

The vote had been scheduled for the end of 2007. The United Nations brokered a delay because of bickering between politicians over whether a vote should be allowed at all. Kurdish politicians are pushing for it, saying it is mandated by Iraq's constitution. Arabs and Turkmen are resisting, threatening more delays.

Kirkuk's ethnic makeup has long caused tensions that have been sharpened by the region's oil resources. In the 1990s, Saddam Hussein expelled 120,000 Kurds and other ethnicities from the region, making way for Arabs. After the U.S.-led invasion in 2003, Kurds returned, displacing many of the Arabs. Kurds are now estimated to make up at least 50% of the population, Arabs at least 30% and Turkmen less than 20%.

Kirkuk is also Iraq's oil hub in the north. An export pipeline linking the country's northern fields here has the capacity to export 1.6 million barrels per day to the Turkish port of Ceyhan. But because of repeated attacks, it has been mostly shut down since the U.S. invasion.

After security improvements were made last summer, the pipeline began pumping about 300,000 barrels per day, although the supply can be erratic. The Iraqi government hopes to raise exports to 400,000 barrels per day. The U.S. Army Corps of Engineers is working with Iraqi contractors to build a $28 million protective fence around a pipeline that runs from Kirkuk to the Beiji refinery, which is scheduled to be completed in April.

Despite the challenges, some political tensions here have eased. Sunni Arabs last December ended a boycott of the local government that had lasted over a year. Since then, an Arab deputy governor, Rakan Said, has been appointed. Kurds and Arabs are working on an agreement to release some of the 1,500 Arab detainees that Arab politicians say have been unfairly jailed in prisons in Kurdistan. Kurdish officials say the detainees are terrorists.

But the province's Turkmen bloc is still holding out. It holds nine seats on the province's 41-member council, and is refusing to rejoin the government, saying the Kurds, who hold 26 seats, have undue influence on the council. The other six seats belong to Sunni Arabs. Earlier this month, Iraqi President Jalal Talabani, a Kurd, visited to try to convince the Turkmen to join the government.

The standoff is frustrating for citizens, who watch their once-proud city crumble. "We don't care who the ruler of Kirkuk will be," says Jassem Obaidi, a Sunni Arab. "We just care about services, jobs and a place to sleep."

Kirkuk suffers from 50% unemployment along with erratic supplies of electricity and water. The region has had five years of drought. Early this month, water was shut off for up to 10 days in some areas.

Uncollected garbage is strewn across many Kirkuk streets. An Iraq cholera outbreak started here last summer, and health officials fear cases could crop up again this year as the weather gets warmer.

"We don't have a sewage system, the streets are bad and the government doesn't serve the regular citizens," says Ahmed Mohaldin, a Kurd. His salary of about $124 a month running a small market isn't enough to pay his rent and pay for living expenses for his family. He said that government officials should take care of those kinds of problems, instead of fighting over control of the city.

Resolution is unlikely to come from joining Iraqi Kurdistan. The Kurdish region, like the rest of Iraq, suffers from similar problems of unemployment and lack of basic services.

U.S. military officers, diplomats and Iraqi officials here are pushing to create jobs and restore basic, municipal services, reflecting an emphasis this year on making economic gains across Iraq. U.S. reconstruction officials are pushing Iraqi counterparts -- increasingly subsumed with the referendum in the city -- to look for ways to help residents in the rural provinces. For instance, Howard Keegan, an American reconstruction official, said farmers in the province need fertilizer and improved irrigation systems.

Rizgar Ali, a Kurdish provincial council chairman, said the government's focus on the referendum is understandable because it is a matter of democracy and self-determination for the people of Kirkuk.

But officials realize they have to do a better job in providing for residents. Earlier this month, mayors from around Tamim province came to Kirkuk to talk to provincial officials about their needs.

Kirkuk residents, however, are growing impatient with all the politics.
"Let Kirkuk be whatever it will be," says Ateela Unis, a Turkmen, who complains he can't afford a doctor for a 10-year-old son suffering breathing problems. His poor neighborhood lacks water and power. "I just want my son's health back, good services and a good life for my family."