The Kurdistan Regional Government (KRG) offered to hold talks with Iraqi authorities on the status of Kurdish airports, border posts and banks, on which they placed restrictions following an independence referendum.
Baghdad took the measures in an attempt to isolate the KRG after last month's referendum.
The government in Baghdad, which declared the vote illegal, imposed a ban on direct international flights to the northern region. It also demanded that the KRG hand over control of its border posts, and stopped selling dollars to four Kurdish-owned banks.
"To avoid this collective punishment, we invite (Iraqi Prime Minister) Haider al-Abadi, again, that we ready to any from of dialogue and negotiations in conformity with the Iraqi Constitution," the KRG said a statement published overnight.
It offered discussions "regarding the crossings, internal trade, providing services to the citizens, the banks and the airports."
The statement marked a change of tack by Kurdish authorities, which on Wednesday accused Iraqi forces and Iranian-trained Iraqi paramilitaries of "preparing a major attack" on the oil-rich region of Kirkuk and near Mosul in northern Iraq. [L8N1MM5J1]
An Iraqi military spokesman denied any attack on Kurdish forces was planned, saying government troops were preparing to oust Islamic State militants from an area near the Syrian border.
Iraq's Supreme Judicial Council issued arrest warrants on Wednesday for the chairman of the Kurdish referendum commission and two aides for "violating a valid (Iraqi) court ruling" banning the independence vote as against the Constitution.
Neighboring Iran and Turkey back Iraq's uncompromising stance, fearing the spread of separatism to their own Kurdish populations.
Kirkuk, a Kurdish-held multi-ethnic region, has emerged as a flashpoint in the crisis between Baghdad and Erbil as it is claimed by both sides.
Iraqi forces and Shi'ite paramilitaries, known as Popular Mobilisation, are deployed south and west of Kirkuk, in areas previously under the control of Islamic State.
The area around the border post of al-Qaim, in western Iraq, is the last Iraqi region still under the control of the militants who overran a third of the country in 2014.