A cold war is looming between Iraq's Shia-led government and the country's Kurds, writes Salah Nasrawi When US troops invaded Iraq in 2003, Iraq's Shias and Kurds joined forces with them and supported the overthrow of the Sunni-led regime of former Iraqi president Saddam Hussein. This alliance subsequently took power in Iraq and worked to reshape the country as a federal state, aiming to prevent any future government in Baghdad from becoming a new centre of power. Nine years later, the former allies are engaged in a bitter row over the centralisation of power and distribution of national resources. As relations between the country's Kurds and Shias have worsened, some Kurdish leaders have started calling for an independent Kurdish state, the crisis coming as a surge of sectarian violence has left Iraq as a whole in its worst political crisis since the 2003 US-led invasion. The tensions became evident after Shia Prime Minister Nuri Al-Maliki was named for a second four-year term in 2010 and started showing signs of wanting to expand his power base. Al-Maliki may have expected that any reprisals from the Kurds and the Sunnis, Iraq's other two major groups, would be limited. A row erupted in December after Iraqi Vice President Tariq Al-Hashemi fled Baghdad for the autonomous Kurdish region, in order to avoid prosecution at the hands of the Shia-led central government on charges of terrorism and running death squads. While the government in Baghdad wants al-Hashemi, one of Iraq's leading Sunni Muslim politicians, to be handed over for trial, the regional Kurdish government has vowed that it will not send him back to stand trial in Baghdad. The dispute escalated this week after the region's leader, Masoud Barzani, insisted that "Kurdish ethics" forbade al-Hashemi's extradition. Barzani also said that Baghdad had asked the Kurdish administration to let Al-Hashemi leave Iraq in order to avoid being put on trial, something which amounted to accusing Al-Maliki's government of hypocrisy. "Our response was that we do not work as [people] smugglers and we won't do it," Barzani told a gathering of his Kurdistan Democratic Party in Erbil, the Kurdish provincial capital, last Thursday. Barzani also lambasted the Baghdad government over other long-running disputes, such as oil and power-sharing with the central government. He renewed criticisms of Al-Maliki's authoritarian style of government and of his alleged attempts to marginalise the Kurds and Sunnis. "Some in Baghdad believe they are the rulers of Iraq and want to work unilaterally," he said. "They are losers who have failed to give Iraq anything, unlike what we have done for our people in Kurdistan, and they want us to be like them," Barzani said, echoing criticisms by many Iraqis that al-Maliki's government has failed to bring security and restore basic services to Iraq some seven years after assuming power. Barzani also defended the contracts his administration has signed with foreign oil companies, which Baghdad says are illegal. He said the contracts were fully constitutional and accused the Baghdad government of miscalculating the Kurdish share of the nation's resources. His remarks followed reports that US oil giant ExxonMobil had frozen its contract for six exploration blocs with the Kurdistan government after threats from Baghdad that it would block Exxon from bidding for future oil projects and would reconsider its role in other projects. Along with several other oil giants, Exxon is participating in projects intended to make Iraq the world's biggest source of new oil finds over the next few years, but the US company's decision to sign a deal with the Kurds last November has infuriated Al-Maliki's government. Baghdad says the Kurds have broken Iraqi law by dealing directly with foreign companies, and it considers most of region's contracts with foreign companies to be illegal, arguing that any deals must receive the green light from Baghdad first. In response, Barzani said that the contracts were "our policy, and we will not change that". Barzani's remarks angered the Shia-led government in Baghdad, raising the political temperature to boiling point. The Shia Iraqi National Alliance also accused the Kurdish government of breaking the law by sheltering a fugitive, referring to Al-Hashemi. "While the Alliance is keen to maintain its strategic relations with the Kurdish Alliance and other Kurdish forces, it stresses the necessity of complying with the constitution, the law and the rulings of the judiciary," the Alliance said in a statement. The tensions seemed to be spinning out of control when members of the two blocs exchanged sharp words, Yassin Majeed, a member of Al-Maliki's ruling party, ridiculing Barzani's mention of "Kurdish ethics". "I wonder if these Kurdish ethics allow [the Kurds] to shelter a man who has killed innocent people," Majeed asked at a press conference. Majeed also accused Barzani of having handed over hundreds of Saddam's opponents to the former dictator's intelligence forces after the Iraqi Republican Guards stormed the Kurdish capital of Erbil in 1996. In a further sign of escalation, several Shia lawmakers demanded that the Baghdad government suspend the 17 per cent share of the Kurdish government in Iraq's state budget and stop paying the salaries of the Peshmerga, the Kurdish paramilitary force. Kurdish officials and lawmakers reacted strongly to the calls, with Kurdish government spokesman Omid Sabah Othman describing Majeed's comments as "immoral and unethical". Farhad Al-Atrushi, a Kurdish lawmaker, accused the Shia-led government of attempting to re-impose the old, Saddam-era system. It would "pay dearly for its policies towards the Kurds", he said. The growing tensions are in many ways shaping up to be a dispute over the future of the Kurds within a unified Iraq. Ever since the 2003 US-led invasion, Iraq's Kurds have enjoyed political autonomy that includes a regional government and parliament and an army under Kurdish control. Some Kurdish politicians are now threatening to secede from Iraq altogether. Barzani's deputy, Kosrat Rasoul, said that the domestic, regional and international circumstances were now in place for the declaration of a Kurdish state. "If the declaration of a state was in my hands, I would declare it today rather than tomorrow," he was quoted as saying by the London-based Asharq Al-Awsat newspaper on Monday. "It is not logical that the Kurds have no state." Barzani himself has on several occasions brandished the threat of Kurdish secession from Iraq. The latest tensions have also come amid reports that the Kurdish government plans to hold a referendum on self-determination soon in Iraq's three Kurdish provinces, as well as in other Kurdish-populated towns in the disputed areas. The war of words between Baghdad and the Kurdish regional government also comes at a time of deepening crisis between Al-Maliki and the Sunni Iraqiya bloc in Baghdad, triggered by the arrest warrant for Al-Hashemi and the dismissal by Al-Maliki of deputy prime minister Saleh Al-Mutleq. The moves caused some of Iraq's predominantly Sunni provinces, such as Anbar, Salaheddin, Diyala and Nineveh, to renew their calls to become federal regions and to gain greater autonomy from Baghdad. Meanwhile, explosions rocked towns and cities across Iraq on Tuesday, killing and wounding hundreds of people. They were the latest in a spate of violence that has targeted Shia neighbourhoods, officials and police posts. The attacks, including one close to the foreign ministry building in Baghdad, come ahead of next week's Arab League summit meeting in the Iraqi capital, designed to showcase the government's ability to restore security to the country following the withdrawal of US troops in December. With Iraq's Sunni-Shia political tensions and sectarian violence on the rise, the Kurdish-Shia dispute is becoming increasingly worrisome and threatening to the country's already fragile peace.