Street battles between ISIL fighters and Kurdish forces erupted on Friday in Kirkuk after ISIL launched a series of surprise attacks in and around the city.
ISIL attacked several police buildings and a power station where eighteen members of the security forces were killed, a hospital official said.
Kurdish forces are getting reinforcements and a curfew is now in place.
Kirkuk lies in an oil rich region and is claimed by both the central government and the Kurds living in northern Iraq.
Kurdish Peshmerga fighters took control of Kirkuk in 2014, after the Iraqi army withdrew from the region, fleeing an Islamic State advance through northern and western Iraq.
Government soldiers and Kurdish fighters are now fighting alongside each other as they push ever nearer to the major Kurdish city of Mosul which remains under ISIL control.
Analysts believe the battle to take the city from ISIL will be the biggest in Iraq since it was invaded by US led forces in 2003.
Iraqi forces, aided by western airstrikes, say they have retaken several villages on the southern outskirts of Mosul.
They have also taken over a nearby sulphur factory which ISIL fighters had set fire to, releasing toxic smoke over the area.
Whilst few doubt the city will be re-taken by the Kurds and the Iraqi army it won’t solve who will take charge of Iraq’s second largest city.
And the fear is that more fighting may be around the corner.
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