Iraqi Kurdish leaders offered Wednesday to freeze the outcome of last month's vote for independence, taking a step back in a major crisis after Baghdad delivered a body blow by seizing swathes of disputed territory.
The proposal came as world powers scrambled to avert any further escalation of the conflict between the key allies in the fight against the Islamic State (IS) militant group that has seen more than 30 combatants killed.
Iraq's Prime Minister Haider al-Abadi did not respond to the proposal during a visit to Ankara but once again slammed the Kurdish authorities for pushing on with the referendum "unilaterally and without any consideration for the rest of Iraq".
Iraq's Hashed al-Shaabi (Popular Mobilisation) force, whose mainly Iran-trained Shiite paramilitaries played a major role in the operation against the Kurds, said a freeze did not go far enough and demanded the outright annulment of the independence referendum.
Washington, Moscow and the United Nations have all pressed Iraqi Kurdish leader Massud Barzani to open talks with Baghdad on a way out of the crisis sparked by the fateful September 25 vote that he called.
The Kurdistan Regional Government, led by Barzani, said it would propose to the federal government "the freezing of the results of the referendum... and the start of an open dialogue" on the basis of the constitution.
It also called for "an immediate ceasefire and cessation of military operations in Kurdistan".
Since early last week, Iraqi federal troops and allied militia have retaken virtually all of the territory held by the Kurds outside their longstanding three-province autonomous region in the north.
There were clashes on Tuesday between government and Kurdish forces close to the frontier with Turkey as Baghdad made a push to reclaim control of key border crossings around the region.
The Hashed al-Shaabi, which has taken a hard line in the dispute with the Kurds, demanded that they annul the independence vote as a precondition for any dialogue.
"The Kurdish proposal is worthless because freezing the referendum means recognising it and the position of the Iraqi government is clear -- the referendum must be annulled," Hashed spokesman Ahmed al-Assadi told AFP.
The independence referendum deeply divided Iraqi Kurdish leaders and many commanders ordered their forces to pull back without resisting.
The loss of so much territory, including the major city of Kirkuk and lucrative oil fields, dealt a huge blow to Kurdish dreams of economic self-sufficiency and eventual independence.
"Today nobody is with us except for God," lamented Mohammed Ali, 59, a trader in the Kurdish capital Arbil.
Barzani's longtime political rival, the Patriotic Union of Kurdistan, had opposed the independence vote and backed a UN plan for negotiations on wider Kurdish autonomy.
The Iraqi constitution adopted during the US-led occupation of 2003-11 provides for plebiscites in the disputed areas on their possibile incorporation in the autonomous Kurdish region.
Washington has made clear that while it will not take sides in the conflict between its Iraq allies, it does not regard Baghdad's reoccupation of the disputed areas as a fait accompli.
"The reassertion of federal authority over disputed areas in no way changes their status -- they remain disputed until their status is resolved in accordance with the Iraqi constitution," State Department spokeswoman Heather Nauert said on Friday.
The United Nations said on Tuesday that it stands ready to broker talks.
UN envoy Jan Kubis "expressed confidence that despite the recent tensions, Iraq will be able to ride this crisis".
"Both sides publicly expressed their willingness to engage in dialogue and negotiations on the basis of the Constitution. The UN is ready to assist, if requested," he said.
Abadi, whose domestic prestige has been sharply boosted by the return of the disputed territories to federal control, has been on a tour of regional countries which share his hostility to Kurdish moves towards secession.
He also held talks in Baghdad on Monday with US Secretary of State Rex Tillerson.
During his visit to Turkey, which is fiercely opposed to Kurdish independence, he was expected to push his demand for the federal government to retake control of border crossings.
As Abadi was looking to press his advantage against the Kurds, Iran -- another neighbour opposed to the vote -- reopened one of its three border crossings with Kurdistan.
Iran closed the crossings in response to the referendum and, like other governments around the world, last month halted flights to Iraqi Kurdish airports at the request of the Baghdad government.