The Iraqi army is shelling Kurd forces with artillery, Kurdish authorities said Thursday.
The Kurdistan Region Security Council said Iraqi troops and Iran-backed militias were hitting the peshmerga positions from an area northwest of Mosul. Peshmerga is Kurdish militia.
The council urged Iraqi forces to withdraw from nearby areas and accept the Kurdistan Regional Government's offer for unconditional talks to settle political differences in a statement issued hours before the shellling began.
It also called on the United States government to "stop Iraq's reckless behavior."
Energy investors have watched the unfolding situation in Kurdish-controlled territory closely this month, as the Iraqi government has moved troops into oil-rich territory that the Kurdish peshmerga liberated from the so-called Islamic State, or ISIS.
The Kurds have sought their own state for a century, but they are currently spread across four countries in the Middle East: Iraq, Iran, Turkey and Syria.
—Reuters contributed to this report.