"He reminded his hosts that we have all sacrificed too much in blood and treasure to see the gains of the last two years lost to political differences," his press secretary Geoff Morrell said after Gates met Massud Barzani, president of Iraq's autonomous Kurdish region.

Gates told Barzani in talks in the Kurdish regional capital Arbil that it is vital both sides move quickly before US forces leave Iraq by the end of 2011 under a security pact with Baghdad.

"He urged them to take advantage of our remaining time in Iraq to settle some of these disputed issues they have with the central government in Baghdad, Morrell told reporters travelling with Gates from Iraq to Turkey.

Gates told the Kurdish leader that "at every negotiating table, history has a seat" and that it is time "to think about the future rather than the past."

He came away encouraged after the meeting, which lasted about an hour, Morrell said. "He's optimistic there can be follow-through on these issues," the spokesman added.

Gates made the same appeal in his talks on Monday with Iraqi Prime Minister Nuri al-Maliki in Baghdad, Morrell said.

The US defence secretary's talks with Barzani came on the second day of a surprise trip to Iraq in which he has spoken of a new era in the country as US troops play a less dominant role.

Gates, who was accompanied on his trip to the autonomous Kurdish region by the top US commander in Iraq General Ray Odierno, pledged on Tuesday that the US will continue to support Iraq's progress towards national unity.

"We will encourage progress toward ensuring all of Iraq's communities are represented in its security forces and institutions," he said at a press conference in Baghdad.

Odierno told reporters that while violence continues to decline overall, tensions between Iraqi Kurds and Arabs over boundaries and oil revenues represent the biggest threat to the country's stability.

"We think that many of the insurgent groups are trying to exploit Kurd-Arab tensions in the north," he said.

The US military is closely monitoring the situation and has set up liaison offices with commanders of Kurdish militia and Baghdad government forces to try to prevent tensions from escalating, he said.

Gates's visit follows elections in the Kurdish region on Saturday that saw a reform-minded opposition group hail a breakthrough against the long-dominant former rebel factions of Barzani and Iraqi President Jalal Talabani.

Barzani was re-elected as regional president but with a reduced majority, prelimary results showed.

On Tuesday, Gates, who is on his first visit to Iraq since US troops withdrew from urban areas at the end of last month under the November security pact, said the transition had been a success so far.

"The feedback I got here is that the agreement has changed the chemistry of the relationship ... in a positive way," Gates told reporters. "Nobody's the boss or the occupier or however you want to put it, but there's a real sense of empowerment by the Iraqis."

Iran's activities in Iraq remain a cause for concern, Odierno said, repeating Washington's charge that Tehran has been arming militia groups.