By Jon Hemming
ARBIL, Iraq, Jan 4 (Reuters) - Iraq's Kurds are determined not to get dragged into a sectarian conflict over Shi'ite Prime Minister Nuri al-Maliki's attempted arrest of the Sunni vice-president, and the Kurds' leader said failure to implement a federal system would lead to disaster.
Nine years after the U.S.-led invasion, much of Iraq is still plagued by Sunni insurgents and Shi'ite militias, but Iraqi Kurdistan has enjoyed relative peace and prosperity after successfully rising up against Saddam Hussein in 1991 and achieving federal autonomy under Iraq's 2005 constitution.
Unless their interests are directly affected, the Kurds have tried to remain largely aloof from the interminable political wrangling that has beset the central government in Baghdad, attempting to act as a mediator to resolve potential conflicts.
But Vice President Tareq al-Hashemi's flight to Kurdistan last month after an attempt to arrest him on accusations of running death squads has thrust the Kurds centre stage in a political drama that could descend into sectarian violence.
"I don't want to be dragged into this," Masoud Barzani, president of the Kurdish region, told Reuters in an interview on Wednesday.
"We are not part of the sectarian struggle that is there. Of course we are part of the political disagreement and political struggle, but not of the sectarian one."
The Kurds have called for a national conference to settle the differences between Maliki and the cross-sectarian Iraqiya bloc which is boycotting parliament and cabinet meetings, accusing Maliki's Shi'ite-led government of concentrating power.
"We are all waiting for the concerned groups to reach an agreement on when and where to meet," Barzani said.
Barzani said he was ready to host the conference, but political sources said Maliki was against meeting in the Kurdish capital Arbil and wanted the issue of Hashemi cleared up first.
"If they decide to have it somewhere else, then it is up to them, but as far as we are concerned, the venue is not a problem," said Barzani, wearing traditional Kurdish costume of khaki baggy trousers, waistcoast and cummerbund.
"I believe many of the concerned groups are not ready to go to Baghdad," he said.
As for the fate of Hashemi, "this something that the judicial system and the courts have to decide," Barzani said. "We will not interfere in whatever proceedings the judicial system decides."
Hashemi says he is willing to be tried inside the Kurdish zone, and insists a fair trial is not possible in Baghdad.
OIL DEAL, FEDERAL SYSTEMThe crisis put the Kurds in a precarious, but potentially powerful position as brokers if any political deal can be reached, and, if not, both Maliki and the Iraqiya bloc would need Kurdish backing in parliament to overcome the other side.
The Kurds may use this as leverage to win concessions on their own strategic interests, such as control of oil resources and territories disputed between Baghdad and Iraqi Kurdistan.
While relatively secure in the mountains of northern Iraq, the Kurds are upset by the Baghdad's failure to resolve the status of Kirkuk, the city at the centre of large oil reserves, which the Kurdish government claims as part of Kurdistan.
A referendum set in Article 140 of the constitution for 2007 has still not been held.
"We as Kurds we have opted for a voluntary union between Arabs and Kurds and for the system of governance in Iraq to be federal. This is a constitutional right therefore for us and for the people of Iraq, we support a federal system in this country," said Barzani who led Kurdish peshmerga forces fighting Saddam from 1979 after the death of his father who fought Baghdad-rule from the 1940s onwards.
"Preventing the implementation of constitutional articles, this will lead the country to face huge problems," he said. "This will bring about disasters."
With political wrangling in Baghdad also holding up a long-awaited law on the future exploitation of oil riches, the Kurdistan government has gone ahead and signed a series of its own oil deals, most notably with Exxon Mobil, much to the annoyance of others in the central government.
Barzani said there was an agreement with Baghdad that each side could continue signing such contracts until the oil law was passed. The Exxon deal also encompasses areas whose control is disputed by Arbil and Baghdad.
"As for places that are called disputed territories by others, for us they are part of the Kurdistan region," said Barzani. "If they have got any disagreement with this then let them come and implement Article 140 as it says in the constitution." (Editing by Louise Ireland)
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