Iraqi troops were dispatched after Kurdish forces refused to surrender positions taken during fightback against IS militants
Negotiations are underway between the presidents of Iraq and Kurdistan to defuse an escalating crisis, after a deadline for Kurdish forces to withdraw from disputed positions was extended by 24 hours.
Iranian Major-General Qassem Soleimani also arrived in Iraq's Kurdistan region for the talks about the escalating crisis.
Soleimani is the commander of foreign operations for Iran's elite Revolutionary Guards, a military corp providing training and weapons to Iraqi paramilitary groups backing the Shia-led government in Baghdad, known as Popular Mobilisation forces.
He arrived in the Kurdish region Saturday, a Kurdish official said.
Earlier on Sunday, thousands of Iraqi troops were locked in an armed standoff with Kurdish forces in the disputed oil-rich province of Kirkuk as Washington scrambled to avert fighting between its allies in the war against the Islamic State group.
The Kurds said on Saturday that Baghdad had set a deadline for their forces to surrender positions they took during the fightback against IS militants over the past three years.
The deadline, originally set for 2am Sunday was extended by 24 hours during a meeting overnight, a Kurdish official said early on Sunday, asking not to be named.
On Saturday, armoured vehicles bearing the Iraqi national flag were posted on the bank of a river on the southern outskirts of the city of Kirkuk, an AFP photographer reported.
On the opposite bank, Kurdish Peshmerga fighters were visible behind an earthen embankment topped with concrete blocks and the red, white, green and yellow colours of the Kurdish flag.
"Our forces are not moving and are now waiting for orders from the general staff," an Iraqi army officer told AFP, asking not to be identified.
Just before midnight in Baghdad Iraqi forces used loudhailers to call on the Peshmerga fighters to withdraw.
The standoff came as Iraqi President Fuad Masum, who is himself a Kurd, held crisis talks in the Kurdish city of Sulaimaniyah.
Kirkuk's governor, a Kurd sacked by Baghdad but who refuses to quit his post, visited the Peshmerga near the Bay Hassan and Havana oilfields with an uncompromising message for the Iraqi forces.
"The demands of the Hashed al-Shaabi [paramilitary forces] to evacuate Kirkuk and hand over control of the territory, its inhabitants and natural resources are totally unacceptable," Najm Eddine Karim told journalists at the scene.
He said the Kurds were in contact with the US-led international coalition against IS, which could observe the situation on the ground with its military overflights.
The two sides have been at loggerheads since the Kurds voted overwhelmingly for independence in a 25 September referendum that Baghdad rejected as illegal.
'At any cost'
Polling was held not only in the three provinces of the autonomous Kurdish region but also in adjacent Kurdish-held areas, including Kirkuk, that is claimed by both Baghdad and Iraqi Kurdistan.
Iraqi Prime Minister Haider al-Abadi has said there can be no further discussion of the Kurds' long-standing demands to incorporate Kirkuk and other historically Kurdish-majority areas in their autonomous region until the independence vote is annulled.
He insisted on Thursday that he was "not going ... to make war on our Kurdish citizens".
But thousands of heavily armed troops and members of the Hashed al-Shaabi, or Popular Mobilisation forces, which are dominated by Iran-backed Shia militias, have massed around Kirkuk.
They have already retaken a string of positions to the south of the city after Kurdish forces withdrew.
The Kurds have deployed thousands of Peshmerga fighters to the area around Kirkuk itself and have vowed to defend the city "at any cost".
A Peshmerga commander on the western front said Kurdish fighters had "taken all the necessary measures" and were "ready for a confrontation" if necessary.
If "the other side makes the mistake of advancing, we'll give them a lesson they won't forget in a hurry," Kamal Kirkuki said.
The June 2014 lines are those that the Kurds held before IS militants swept through vast areas north and west of Baghdad, prompting Iraqi federal units to disintegrate and Kurdish forces to step in.
The Kurds control the city of Kirkuk and three major oil fields in the province that account for a significant share of the regional government's oil revenues.
Washington has military advisers deployed with both sides in the standoff and Defence Secretary Jim Mattis said on Friday the United States was working to reduce tensions.
"We are trying to tone everything down and to figure out how we go forward without losing sight of the enemy," Mattis told reporters.
"Everybody stay focused on defeating ISIS. We can't turn on each other right now," he added, using an alternative acronym for IS.