RPT-WRAPUP 2-Iraq rejects $8 bln Kurdish Nabucco pipeline deal

(Refiles to change headline)

* Baghdad opposes Kurdish region's gas deal with UAE firms

* Baghdad says to supply Europe from another field

* Russia says will complete its project first

By Mohammed Abbas and Simon Webb

BAGHDAD/DUBAI, May 18 (Reuters) - The Iraqi government on Monday rejected an $8 billion Kurdish plan to fill the Nabucco pipeline with gas for Europe, a major setback to a project designed to reduce the continent's reliance on Russian energy.

Opposition in Baghdad to the deal to obtain gas from Iraq's Kurdistan region hands Russia the initiative as it races to complete its own alternative to the Western-backed pipeline and tighten its grip on European energy markets.

"We will not allow any side to export gas from the region without the approval of the central government and the Iraqi Oil Ministry," Iraqi Oil Minister Hussain al-Shahristani said, a day after EU and Arab firms unveiled their plan to pump Kurdish gas.