Egypt's President Abdel Fattah al-Sisi said on Sunday a referendum on the independence of Iraq's Kurdish region would lead to a "catastrophic" break up of the country, which is facing an onslaught by Sunni Islamist militants.

The comments from Sisi, leader of the most populous Arab nation, indicate a growing fear in the region that the division of Iraq could further empower the insurgents who have declared a "caliphate" on land seized in Iraq and neighbouring Syria.

"The referendum that the Kurds are asking for now is in reality no more than the start of a catastrophic division of Iraq into smaller rival states," Egypt's MENA news agency quoted Sisi as saying during a meeting with local journalists.

The president of Iraq's autonomous Kurdish north, Massoud Barzani, asked the region's parliament on Thursday to prepare the way for a referendum on independence.

Iraq's five million Kurds, who have ruled themselves in relative peace since the 1990s, have expanded their territory by up to 40 percent in recent weeks as the Sunni Islamist militants seized vast stretches of western and northern Iraq.

Egypt, a traditionally regional diplomatic heavy weight, has been embroiled in domestic turmoil for three years since a 2011 uprising ousted autocratic President Hosni Mubarak.

Sisi said he warned the United States and Europe about the ambitions of the Islamic State militants, which have shortened their name from the Islamic State in Iraq and the Levant (ISIL).

"ISIL had a plan to take over Egypt," Sisi said. "I had warned the United States and Europe from providing any aid to them and told them they will come out of Syria to target Iraq then Jordan then Saudi Arabia."

Sisi, Egypt's former army chief, last year orchestrated the ouster of the state's Islamist President Mohamed Mursi, in reaction to mass protests against his rule.