July 20, 2007 | By BEN LANDO | UPI Energy Correspondent

WASHINGTON, July 20 (UPI) -- A voter registration list of residents in Iraq's oil-rich northern disputed territories is to be completed by the end of July. It marks a long-awaited step for Iraq's Kurds, who claim the area was ripped from them by Saddam Hussein's policies.

Little noticed, however, amid the violence in the rest of Iraq, is the potential that a referendum for the disputed territories, especially Kirkuk, could be the match that ignites a powder keg.

More than 10 percent of Iraq's 115 billion barrels of proven oil reserves -- the third-largest in the world -- is located in the Kirkuk area. The city has been historically Kurdish, though Turkomen, Christian and Sunni and Shiite Arabs are far from strangers.

Kurds felt the brunt of Hussein's northern prerogative as he gassed populations and deprived the region of investment. And, as part of his Arabization program, he forcefully displaced them with his fellow Sunnis Arabs.

Iraq's Kurds looked to the post-Hussein era to reverse that. They demanded semi-autonomy during the formation of the government and the 2005 constitution. In an oil law now stuck in negotiations, Kurds want strong regional and local control over a large segment of the oil sector.

The Kurdish leadership has complained the federal government has been slow in enacting constitutional obligations to bring back to the disputed territories Kurds who were displaced, verify eligible voters and, by the end of this year, hold a referendum.

"There is still a lot of disappointment," Qubad Talabani, the son of Iraqi President Jalal Talabani and the Kurdistan Regional government's representative to the United States, told United Press International earlier this month. "There is slow progress or lack of progress made in normalizing Kirkuk."

If approved in the referendum, the territories would be part of the KRG.

The KRG maintains the debate is about nothing but righting past wrongs and uniting an ethnic nation. Not all agree. Violence in the area has kicked up as of late as the referendum draws close. Sunni insurgents who have rendered useless an oil pipeline from Kirkuk to Ceyhan, Turkey, are now blamed for targeting Kirkuk's residents.

The latest and deadliest was three suicide car bombings Monday that killed more than 85 and injured nearly 200; the largest was outside the Kirkuk offices of Talabani's Patriotic Union of Kurdistan. Attacks have also escalated in the relatively safe KRG region.

Opponents of the referendum aren't limited to inside Iraq. Looming largest is Turkey, which already has amassed troops on its border with Iraq as it continues to threaten an invasion.

Turkey's bombs fell in northern Iraqi areas where Ankara claims rebel Kurdistan Workers Party bases are located. Media reports say no one was killed, but residents of the town of Zakho, Iraq, fled the violence. Turkey says the PKK, which wants a separate state, plans and executes attacks in Turkey from Iraq. The bombing came after three Turkish soldiers were killed by a landmine near Iraq's border. And it's fodder for Sunday's Turkish national election, which used anti-PKK sentiment as a steady campaign platform.

Iraq has warned against such an invasion and condemned the bombings. The United States, late to address the Turkey-Iraq beef, has appointed an envoy to focus on the PKK and is trying to mediate a lasting truce.

Decision-makers in Washington have yet to move the issue of Kirkuk and other disputed territories up on their Iraq agenda despite recommendations from international reports and studies President Bush ordered.

In its Dec. 6 report, The Iraq Study Group, co-chaired by former Secretary of State James Baker and former Democratic Congressman Lee Hamilton, called for an "international arbitration" on the issue.

"A referendum on the future of Kirkuk ... would be explosive and should be delayed," the report recommended.

"With all sides dug in and the Kurds believing Kirkuk is a lost heirloom they are about to regain, the debate should move off outcomes to focus on a fair and acceptable process," the Brussels-based International Crisis Group recommended in an April report. "For the Kurds, that means postponing the referendum, implementing confidence-building measures and seeking a new mechanism prioritizing consensus."

The ICG blamed Washington for ignoring the Kirkuk issue while implementing the troop surge. Hold a referendum, civil war spreads to Kirkuk and Iraqi Kurdistan, the report assessed. Postpone it without a Kurd-approved deal, the government in Baghdad could implode. It recommended the United States and international allies move toward an alternative that calms Ankara's nerves and cements Kurds' power in a federal Iraq via a now stalled oil law.

Turkey fears a larger and stronger Iraqi Kurdistan would embolden its own sizeable Kurdish population to demand autonomy, as do Iran and Syria. All three, along with Iraq, could oppose any country of Kurdistan.

"Thus, what the Kurds have seemingly gained, albeit largely through peaceful negotiations and skillful political horse-trading, could be lost to internal violence and external military action," the Public International Law & Policy Group wrote in a report last month. The report didn't call for the referendum to be held or stalled; rather, it recommended a nuanced political and constitutional compromise.

To Iraq's Kurds, however, questioning the referendum is a non-starter. The outcome, if it's held, is likely to be dominated by pro-KRG Kurdish voters, and the aftermath would be realized in a more robust Iraqi Kurdistan.

It's a semblance of democracy in today's Iraq, but a dichotomy of reality and what President Bush promised in an April 2003 address to Iraq's citizens: "You will be free to build a better life ... free to join in the political affairs of Iraq. And all the people who make up your country -- Kurds, Shi'a, Turkomans, Sunnis, and others -- will be free of the terrible persecution that so many have endured."