By Mustafa Mahmoud
KIRKUK, Iraq (Reuters) - Kurdish Peshmerga forces have retreated to positions they held in northern Iraq in June 2014 in response to an Iraqi army advance into the region after a Kurdish independence referendum, a senior Iraqi commander said on Wednesday.
An Iraqi military statement said government forces had taken control of Kurdish-held areas of Nineveh province, including the Mosul hydro-electric dam, on Tuesday after the Peshmerga pulled back. On Monday, Baghdad's forces recaptured the major oil city of Kirkuk to the south shortly after the Peshmerga abandoned it.
The Peshmerga had advanced into Nineveh and the Kirkuk region over the past three years as part of the war against Islamic State militants, filling a void left by a temporary collapse of the Iraqi army in the face of an IS onslaught.
"As of today we reversed the clock back to 2014," the Iraqi army commander, who asked not to be identified, told Reuters. There was no immediate comment from Kurdish leaders.
The territory taken by the Peshmerga as it rolled back Islamic State was outside the official boundaries of the autonomous Kurdish Regional Government (KRG), mainly in Kurdish-populated areas claimed historically by the Kurds.
With this week's withdrawals from disputed territories, Peshmerga forces appeared to have re-deployed roughly along the KRG's boundaries.
Iran and Turkey joined the Baghdad government in condemning the Iraqi Kurds' Sept. 25 referendum, worried it could worsen regional instability and conflict by encouraging their own Kurdish populations to push for homelands.
With the referendum having given Iraqi Prime Minister Haider al-Abadi a political opening to regain contested land and shift the balance of power in his favor, it may prove a gamble that makes the KRG's quest for statehood more elusive.
61,200 DISPLACED BY IRAQI ADVANCE
Around 61,200 people were displaced Iraq's military operation in and around Kirkuk, a city of over 1 million, over the past 48 hours but most were now returning to their homes, the U.N. humanitarian affairs office in Baghdad said.
Witnesses said, however, that dozens of Kurdish families began to flee Kirkuk on Wednesday for Sulaimaniya inside the KRG for fear of attack by Shi'ite Popular Mobilization paramilitaries, allied with Baghdad and armed by Iran, that had entered the city along with government forces.
"We have a family member with the Peshmerga and we are afraid we might get arrested by the Popular Mobilization. We are fleeing towards Sulaimaniya," said the driver of one car filled with his family.
At least 150 vehicles were seen streaming out of Kirkuk at one point. But most subsequently turned around and returned home after local police assured them that fears of reprisals were groundless, a Reuters reporter said.
Though Kurdish-owned shops in Kirkuk were mainly closed on Wednesday due to concern about the presence of Shi'ite militia, there were no reports of serious incidents as federal security forces patrolled the streets, witnesses said.
"We call on all parties to do everything possible to shield and protect all civilians impacted by the current situation," Lisa Grande, the U.N. humanitarian coordinator in Iraq, said.
Abadi ordered the prosecution of anyone found circulating fake videos aimed at inciting strife between Kurds and Arabs and endangering civil peace in areas retaken by Baghdad's forces.
The Kurdish vote was championed by KRG President and KDP party chief Masoud Barzani but not supported by the rival PUK party, in part because of the strong opposition of the Kurds' longtime ally the United States.
The United States sided with Abadi's Shi'ite-led government in rejecting the Kurds' secessionist move. Barzani has stood by it, saying the overwhelming "yes" for independence "won't be in vain" and would be pursued by peaceful means.
Kurds have sought an independent state since at least the end of World War One, when colonial powers divided up the Middle East after the multi-ethnic Ottoman Empire fell apart and left Kurdish-populated land split between Turkey, Iran, Iraq and Syria.
(Additional reporting by Ahmed Rasheed; writing by Maher Chmaytelli; editing by Mark Heinrich)