A delegation representing Iraq's ruling Shi'ite coalition may meet Kurdish politicians again next week to try to convince them to delay or cancel a plan to hold an independence referendum, a negotiator said.
A first round of talks, held last week in Baghdad, brought the two sides closer and a second round could be held next week in the Kurdish capital Erbil, Abdullah al-Zaidi, a negotiator from the National Alliance, Iraq's Shi'ite Muslim ruling coalition, told Reuters on Monday evening.
The Kurdish delegation held separate meetings last week with Prime Minister Haider al-Abadi and the National Alliance, in addition to other political parties in Baghdad.
A Kurdish official, Mala Bakhtiar, on Saturday told Reuters the possibility of postponing a planned Sept. 25 referendum on independence could be considered in return for financial and political concessions from the central government in Baghdad.
The United States and other Western nations fear the vote could ignite a new conflict with Baghdad and possibly neighboring countries, diverting attention from the ongoing war against Islamic State (IS) militants in Iraq and Syria.
U.S. Secretary of State Rex Tillerson formally asked Massoud Barzani, president of the autonomous Kurdistan Regional Government (KRG), two weeks ago to postpone the referendum.
U.S. Defense Secretary Jim Mattis plans to press Barzani again to call off the referendum when they meet on Tuesday in Erbil, the Kurdish capital in northern Iraq, a U.S. official traveling with him told Reuters.
"They (the Kurds) want guarantees," said Zaidi, who in charge of relations with the Kurdish parties at the National Alliance. "The question of the guarantees has been left to the next round of talks."
The Kurds will not agree to consider to delay the vote without fixing another date for it, said Bakhtiar, executive secretary of the Patriotic Union of Kurdistan (PUK) Politburo.
At the political level, Baghdad should commit to agree to settle the issue of disputed regions such as the oil-rich area of Kirkuk, where Arab and Turkmen communities also live, he said.
On the economic side, Baghdad should be ready to help the Kurds overcome a financial crisis and settle debts owed by their government, he told Reuters in the Kurdish city of Sulaimaniya.
He estimated the debt at $10 billion to $12 billion, about equal to the KRG's annual budget, owed to public works contractors and civil servants and Kurdish peshmerga fighters whose salaries have not been paid in full for several months.
Baghdad stopped payments from the Iraqi federal budget to the KRG in 2014 after the Kurds began exporting oil independently from Baghdad, via a pipeline to Turkey.
The Kurds say they need the extra revenue to cope with increased costs incurred by the war against Islamic State and a large influx into KRG territory of displaced people.
The self-proclaimed IS "caliphate" effectively collapsed in July when U.S.-backed Iraqi forces recaptured Mosul from the militants after a nine-month campaign in which Kurdish peshmerga fighters took part.
The Sunni Muslim jihadists remain, however, in control of territory in western Iraq and eastern Syria. The United States has pledged to maintain its support of allied forces in both countries until the militants' total defeat.
The Kurds have been seeking an independent state since at least the end of World War One, when colonial powers divided up the Middle East and left Kurdish-populated territory split between modern-day Turkey, Iran, Iraq and Syria.
Turkey, Iran and Syria, which together with Iraq have sizeable Kurdish communities, all oppose an independent Kurdistan. Prime Minister Haider al-Abadi's government has rejected the planned referendum as "unilateral" and unconstitutional.
Iraq's majority Shi'ite population mainly lives in the south while the Kurds, largely secular Sunnis, and Sunni Arabs inhabit two swathes of the north. Central Iraq around Baghdad is mixed.
Kurdish officials have said disputed areas, including the Kirkuk region, will be covered by the referendum, to determine whether they would want to remain in Kurdistan or not.
The Kurdish peshmerga in 2014 prevented Islamic State from capturing Kirkuk, in northern Iraq, after the Iraqi army fled in the face of the militants. The peshmerga now effectively run the Kirkuk region, also claimed by Turkmen and Arabs.
Hardline Iran-backed Iraqi Shi'ite militias have threatened to expel the Kurds from this region and three other disputed areas - Sinjar, Makhmour and Khanaqin.