Iran urges Iraq to delay poll on volatile oil city

By Ross Colvin

BAGHDAD (Reuters) - Iran has urged Iraq to postpone a divisive referendum to decide the fate of Kirkuk, an ethnically mixed city that sits on giant oil fields, as part of a series of measures Tehran says will stabilise the country.

The plan was presented on Saturday by Foreign Minister Manouchehr Mottaki at a meeting of Iraq's neighbours in Istanbul but was little noticed amid the frantic diplomacy to avert a Turkish incursion into Iraq to hunt down separatist rebels.

Iran's official IRNA news agency said Mottaki proposed a two-year delay for the referendum, due by Dec. 31, which will decide whether the city is incorporated into Iraq's largely autonomous Kurdistan region.

An Iranian official familiar with the plan said Tehran believed Baghdad was already juggling too many divisive political issues, including how to share oil revenues equitably. Kirkuk was seen as one hot potato too many.

Iraqi officials said their delegation listened politely to the Iranian suggestion, part of a package of proposals that also urged Baghdad to begin a withdrawal of foreign troops.

"We accept the advice, but we refuse to let anyone interfere with Iraq's internal affairs," Iraqi government spokesman Ali al-Dabbagh told Reuters from Istanbul.

Iran says the plan was put forward to help bring stability to Iraq -- although Washington accuses Tehran of promoting violence and backing Shi'ite militias.

Iran has a Kurdish minority and, like Turkey, fears that if Iraqi Kurds control Kirkuk and its oil wealth, this could fuel Kurdish separatism.