Incumbent president Massud Barzani is widely expected to be returned to office while his Kurdistan Democratic Party (KDP) and Iraqi President Jalal Talabani's Patriotic Union of Kurdistan (PUK) are likely to sweep the legislative poll, in which more than 2.5 million Kurds are eligible to vote.

The two parties, which have dominated the region's politics for decades, have presented a joint list, mostly of new candidates in a bid to present an image of renewal, but face a number of challengers seeking to break their stranglehold.

More than 100,000 Kurdish members of Iraq's armed forces were voting on Thursday, along with police, prisoners and the sick, ahead of election day.

"I'm very happy to be exercising my democratic right," said soldier Hadi Sultan, 33, as he cast his ballot at a polling station in the capital, Baghdad.

Saturday's main vote is being held six months after the rest of Iraq held provincial elections and as the US military is planning its pullout from the country in 2011.

In the election run-up, tensions between Barzani and the central government of Prime Minister Nuri al-Maliki heightened over Kurdish claims to 16 disputed areas including oil-rich Kirkuk and parts of three other historically Kurdish-populated provinces -- Diyala, Nineveh and Salaheddin.

During the US-led invasion of 2003, Kurdish peshmerga rebels who had fought the regime of ousted dictator Saddam Hussein occupied many of the disputed areas.

The former rebels are now deployed alongside soldiers of Iraq's national army, triggering a tense face-off that has raised the prospect of armed conflict.

Barzani insisted on Sunday he will not "compromise" on the long-standing claims to Kirkuk and repeated his demand that the issue be settled by a referendum called for under the Iraqi constitution, despite opposition from Arab and Turkmen communities.

"The next government will have major challenges to face," said former Kurdish culture minister Sammy Shourash.

"The most pressing of those is resolution of the territorial and constitutional conflict with the central government in Baghdad."

Dyandar Zebari, who coordinates the Kurdish government's relations with the United Nations, said the next administration will also have to reach a deal with Baghdad to share energy resources from northern Iraq's many oilfields.

On June 1, the Kurdish administration began exporting oil for the first time, but Baghdad is contesting the region's right to sign contracts without central government approval.

Disagreements over oil rights have hamstrung exploitation of much of Iraq's massive proven reserves and long-delayed hydrocarbons law, prompting fierce Kurdish criticism.

Kurds are also increasingly concerned about corruption, with many voicing support for change after decades of PUK and KDP dominance.

"It is very important that changes occur in Kurdistan," said Mustafa Khalil, a 34-year-old Arbil shopkeeper. "Government institutions must be reformed to eliminate administrative and financial corruption."

Street vendor Karwan Ahmed, 27, added: "All the electoral programmes are similar, and contain the same old promises."

"We need an opposition that can put pressure on the government until it provides better services for its citizens."

Independent candidates like Nusherwan Mustafa, a wealthy entrepreneur and former PUK deputy leader, are working to break the PUK-KDP dominance.

"We think that Kurdish society, after a political stabilisation, now needs economic, social and cultural reforms," said Mustafa, head of the Change List.

"We are a political force with real popular support. We did not buy the people's loyalty by distributing money."

Five candidates have registered for the presidential race, including Barzani, while 24 political lists will contest the 111 seats in the assembly which first sat in 1992.

It is the first time the regional president will be elected by popular vote.

In 2005, Barzani was elected by parliament in Iraqi Kurdistan, which covers the provinces of Arbil, Dohuk and Sulaimaniyah and has its own flag, national anthem and national day.