(Bloomberg) -- Just north of Mosul, Iraq's second- biggest city, an ornamental metal gate spans the highway. Beyond it, the sunburst-on-tricolors of the Kurdistan flag proliferate in this region 20 miles (32 kilometers) south of the Kurds' agreed-to autonomous zone in the country's far northeast.
Neither Iraqi police nor soldiers venture beyond the gate.
The changed scenery reflects the slow, relentless expansion of Kurdish forces into territory far from their officially sanctioned region. The Kurds say that they are simply recovering land where they lived before the late Iraqi leader Saddam Hussein expelled them during his harsh 24-year rule.
The move is creating potentially explosive tensions in mixed ethnic areas of Kurds, Arabs and other minorities at a time when U.S. forces in Iraq are preparing to withdraw.
"We are providing safety in territories that are ours," said Captain Abdullah, a Kurdish military operations officer based in Tel Keif, a village just 10 miles north of Mosul. "Saddam kicked out Kurds, Arabs came in. Kurds are back, Arabs fled. If the Iraqi army comes, they will stab us in the back and expel Kurds again." He declined to allow his family name to be used out of fear for his safety.
Since Hussein's overthrow during the 2003 U.S.-led invasion, Kurdish troops, known collectively as the peshmerga, have moved into towns and villages in Nineveh, Tamim and Diyala provinces, places where the Iraqi Army, started from scratch in 2004, has been absent.
All the areas lie beyond the frontiers of the three- province autonomous zone that is ruled by a pair of Kurdish parties under agreement with the central government.
If left unresolved, opposing territorial claims could lead to military clashes, said the International Crisis Group, a Brussels-based conflict management advisory group, in a report on its Web site.
"As U.S. forces are set to draw down in the next couple of years, Washington's leverage will diminish and, along with it, chances for a workable deal," said the ICG. "The most likely alternative to an agreement is a new outbreak of violent strife over unsettled claims in a fragmented polity governed by chaos and fear."
American forces will exit Iraq by the end of 2011 under an accord last year between the administration of former President George W. Bush and the Iraqi government. Last month, President Barack Obama unveiled plans to pull all but 50,000 of the U.S.'s troop strength of 140,000 from Iraq by August 2010. The rest would be used mostly for training and aiding the Iraqi Army.
Friends With Both
It is unclear whether the land rivalry can be resolved by then. The U.S. is friendly with both Prime Minister Nuri al- Maliki, who is trying to keep Iraq whole in the face of sectarian and communal violence, and the Kurds, who have provided troops to pacify rebellious, anti-U.S. parts of the country.
The contested territory includes the city of Kirkuk, the hub of Iraqi oil production in the north. Kurdish officials have been lobbying to absorb Kirkuk into their autonomous zone and to control the area's oil wealth; the central government objects.
Nechirvan Barzani, prime minister of the Kurds' regional government, appealed for U.S. mediation on Feb. 17 in the Kurdish city of Arbil. "What we understand by a responsible withdrawal is that the United States should resolve the problems outstanding in Iraq and help the Iraqis confront these problems," he told a press conference.
The U.S. military, which patrols both Mosul and areas north of the gate, has no intention of acting as referee, said Colonel Gary Volesky, overall commander of the 3rd Heavy Brigade Combat Team. He described the American mission as battling Sunni Muslim insurgents and al-Qaeda, the global terror organization that has agents and followers in the area.
"Kurdish-Arab tension has to be addressed, but we can't play the go-between," Volesky said in an interview.
Unlike most Iraqi tensions, the battle in the north is based not on religion but on an ethnic conflict between Kurds, about 20 percent of Iraq's total population, and Arabs, who account for most of the rest. After Hussein's fall, thousands of Arabs fled areas near the Kurdish autonomous zone and were replaced by Kurds.
Kirkuk has become a city of dueling demographics. Kurds say they make up 40 percent of the population; Arabs say Arabs make up half. Turkmen, Iraq's third-largest ethnic group, also say they are half of Kirkuk's population.
Provincial elections that were held on Jan. 31 elsewhere in Iraq were canceled in Kirkuk because no one could work out exactly who was a resident and thus eligible to vote.
A regional referendum on Kirkuk's status, constitutionally scheduled for 2007, has been repeatedly put off. The central government plans to issue guidelines for foreign investment in oil in April. Two of the available fields are near Kirkuk, where the Kurds say only they have the right to cut deals, over national government objections.
In northern Nineveh Province, of which Mosul is the capital, political offices of the Kurdistan Democratic Party and the Patriotic Union of Kurdistan have sprouted in several villages. The parties jointly control the peshmerga -- the word means someone who is ready to die. Those forces occupy the Saddam Dam, the country's largest hydroelectric supplier of energy, which lies 35 miles northwest of Mosul.
"They have a choke hold on electricity," said Lieutenant Colonel Benjamin Matthews, who commands Task Force 2-82 of the 3rd Heavy Brigade Combat Team, First Cavalry Division, in northeast Mosul. Matthews noted that no Kurdish units have been integrated into the Iraqi Army.
In Mosul, Colonel Fadl, an Iraqi Army commander, was more charitable than Captain Abdullah in Tel Keif. "The Kurds talk like this because they are afraid," he said. "It is understandable. There is a bad history. Eventually, the Iraqi Army will take over, but after a political decision, not by military force."
By Daniel Williams