BAGHDAD, May 9 (Reuters) - Iraq's central government said on Thursday it would not accept armed groups entering its territory as Kurdish militants began withdrawing from Turkey under a peace deal, but Baghdad has no control over its northern border which is run by Iraqi Kurds.
Under the nascent peace deal, Kurdistan Workers Party (PKK) fighters should cross from Turkey, where they have been fighting for Kurdish rights for three decades, into Iraq's autonomous Kurdistan region where they have their headquarters.
More than 40,000 people have been killed in the conflict which has blighted investment and development in Turkey's mainly Kurdish southeast and tarnished the country's image abroad.
Turkey, the European Union and the United States all list the PKK as a terrorist organisation.
The withdrawal of PKK fighters, ordered late last month by PKK field commander Murat Karayilan, is the biggest step yet in a deal negotiated by the group's jailed leader Abdullah Ocalan and the Turkish government.
The first fighters are expected to arrive at PKK bases in Iraq's Qandil Mountains within a week, monitored on the Turkish side by Ankara's MIT intelligence agency and across the border in Iraq by Iraqi Kurdish authorities.
As well as controlling Iraq's border with Turkey, the Kurdistan Regional Government (KRG) is fiercely defensive of its internal boundary with the rest of the country run by Baghdad.
The central government's ability to intervene directly in the northern enclave is therefore extremely limited, but Baghdad's statement is the first indication of its stance on the process that has raised hopes of peace.
"The Iraqi government ... does not accept the entry of armed groups into its territory that could be used to impact the security and stability of Iraq or neighbouring states," the Ministry of Foreign Affairs said in a statement on its website.
Baghdad nonetheless said it welcomed a non-violent political settlement to the 28-year insurgency.
Relations between largely Sunni Muslim Turkey and Iraq's Shi'ite-led government have been strained by Ankara's burgeoning ties with Kurdistan, which is rich in oil and gas.
In recent years, Iraqi Kurds have antagonised Baghdad by signing contracts on their own terms with international oil companies, and are also pursuing an increasingly independent foreign policy.
Ankara and Baghdad have exchanged accusations of sectarianism after Turkey gave refuge to Iraq's fugitive Sunni vice president, Tareq al-Hashemi. He was sentenced to death in Baghdad in his absence on charges of running death squads, accusations he denied. (Reporting by Raheem Salman; Writing by Isabel Coles; Editing by Jon Hemming)
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