* U.N. concerned at reports of Kurds being displaced
* Iraqi army advance followed Kurdish referendum
* Kurdish leaders ask world's help to spur talks (Adds detail and background)
By Maher Chmaytelli
BAGHDAD, Oct 19 (Reuters) - Kurdish officials said on Thursday thousands of their people had fled Kirkuk region fearing persecution since Iraqi armed forces retook it following a referendum on Kurdish independence that was rejected by Baghdad.
The officials said roughly 100,000 people had gone, though that number could not be confirmed independently, and many Kurdish neighbourhhoods in Kirkuk city appeared to be operating normally.
The United Nations voiced concern at reports that civilians, mainly Kurds, were being driven out of parts of northern Iraq retaken by Iraqi forces and their houses and businesses looted and destroyed, and urged Baghdad to stop any such abuses.
A mayor from the town of Khanaqin, Mohammed Mulla Hassan, said a Kurdish man was killed and six wounded by Iraqi security forces while protesting at the army's takeover there.
Kurdish troops had left Khanaqin, near the border with Iran, on Tuesday to avoid clashing with advancing Iraqi forces.
Central government forces swept into Kirkuk, a multi-ethnic city of more than 1 million people and the hub of a major oil-producing area, largely unopposed on Monday after most Kurdish Peshmerga forces withdrew rather than fight.
Iraqi forces also took back control of Kirkuk oilfields, effectively halving the amount of output under the direct control of the semi-autonomous Kurdistan Regional Government (KRG) in a serious blow to the Kurds' independence quest.
Baghdad's recovery of Kirkuk, situated just outside the KRG's official boundaries on disputed land claimed by Kurds, ethnic Turkmen and Arabs, put the city's Kurds in fear of attack by Shi'ite Muslim paramilitaries, known as Popular Mobilisation, assisting government forces' operations in the region.
Nawzad Hadi, governor of Erbil, the KRG capital, told reporters that around 18,000 families from Kirkuk and the town of Tuz Khurmato to the southeast had taken refuge in Erbil and Sulaimaniya, inside KRG territory. A Hadi aide told Reuters the total number of displaced people was about 100,000.
Hemin Hawrami, a top aide to KRG President Masoud Barzani, tweeted that people had fled "looting and sectarian oppression" inflicted by Popular Mobilisation militia.
U.N. relief officials said they had received allegations that 150 houses had been burned and 11 blown up in Tuz Khurmato and offices of Turkmen political parties in Kirkuk assaulted.
The U.N. Assistance Mission for Iraq issued a statement urging the Baghdad government "to take every action to halt any violations and ensure all civilians are protected and that the perpetrators of acts of violence, intimidation and forced displacement of civilians be brought to justice".
Khanaqin, mainly populated by Kurds, also lies in a long contested territory just outside KRG boundaries.
Iraqi Prime Minister Haider al-Abadi said on Wednesday that security was being maintained in Kirkuk by local police backed by the elite Counter Terrorism Service, trained and equipped by the United States mainly to fight Islamic State militants. "All other armed group should not be allowed to stay," Abadi said.
Sunni Muslim Kurds comprise the largest community in Kirkuk followed by Sunni and Shi'ite Muslim Turkmen, Sunni Arabs and Christian Assyrians, according to the Iraqi Planning Ministry.
In another sign of rising tensions, Iraq's Supreme Justice Council ordered the arrest of KRG Vice President Kosrat Rasul for allegedly saying Iraqi troops were "occupying forces" in Kirkuk.
Iran and Turkey joined the Baghdad government in condemning the Iraqi Kurds' Sept. 25 referendum, worried it could worsen regional instability and conflict by spurring their own Kurdish populations to push for homelands. The Kurds' long-time big power ally, the United States, also opposed the vote.
KURDISH LEADERS WELCOME ABADI OFFER OF TALKS
With the referendum having given Abadi a political opening to regain disputed territory and tilt the balance of power in his favour, the KRG cabinet on Thursday welcomed his call for talks to resolve the crisis.
Abadi had said on Tuesday he considered the referendum "a thing of the past", and asked that the KRG cancel the outcome of the vote as a precondition for negotiations to begin.
In a statement, the KRG cabinet said, "It will not be possible to resolve the issues through military operations".
It added: "(We have) asked the international community to help both sides start a dialogue to solve the outstanding issues based on the Iraqi constitution."
KRG Peshmerga forces deployed into Kirkuk in 2014 when Iraqi government forces fell apart in the face of a lightning offensive by Islamic State insurgents, preventing the oilfields from falling into jihadist hands.
Iraqi armed forces also took control of Kurdish-held areas of Nineveh province north of Kirkuk, including the Mosul hydro-electric dam, after the Peshmerga pulled back.
Crude oil flows through the KRG pipeline to the Turkish port of Ceyhan have been disrupted by a gap between incoming and outgoing personnel since Baghdad's retaking of Kirkuk.
An Iraqi oil ministry official in Baghdad said on Thursday that Iraq would not be able to restore Kirkuk's oil output to levels before Sunday because of missing equipment at two fields.
The official accused the Kurdish authorities previously in control of Kirkuk of removing equipment at the Bai Hasan and Avana oil fields, northwest of the city.
Kurds have sought independence since at least the end of World War One when colonial powers carved up the Middle East after the multiethnic Ottoman Empire sundered, leaving Kurdish-inhabited land split between Turkey, Iran, Iraq and Syria.
(Addditional reporting by Raya Jalabi in Kirkuk and Ahmed Rasheed in Baghdad; Editing by Mark Heinrich and Andrew Heavens)
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