A grave, freshly dug and adorned with pebbles, is the modest tribute to one more sacrifice in the long history of struggle for an independent Kurdish state.

Hogir Fathi was looking forward to home leave in his village in autonomous Kurdistan when the 24-year-old, a fighter in the Iraqi region's peshmerga forces, was killed by a bomb while on the frontline against Islamist militants who last month drove the Iraqi army from most of the north outside the Kurdish zone.

"I am proud my son was martyred," said his father, Mehdi, himself a peshmerga, who fought the army of Saddam Hussein. "There is no sacrifice too great for an independent Kurdistan."

A century after the Kurds lost out in the carve-up of the Ottoman empire after World War One, denied a state of their own and left scattered across four others, that dream is suddenly closer as fighting among Iraq's Arabs - minority Sunnis and the Shi'ites in power - fuels talk of the country being partitioned.

The Kurds of Iraq, who have governed themselves since US air power pinned back the Sunni dictator Saddam after the 1991 Gulf War, have already exploited the chaos to expand their territory by as much as 40 per cent, including the oilfields and city of Kirkuk, which they claim as their national capital.

Their president last week called for a referendum on secession. And there is little doubt it would overwhelmingly back independence, as an unofficial plebiscite did in 2005.

But economics and external pressures, from Baghdad but also from rival allies in Turkey, Iran and Washington, may well hold Kurdish leaders back from risking a final break any time soon.

"All the Kurdish people support it, but the leadership must consider whether the time is appropriate or not," said Kurdistan VP Kosrat Rasul Ali, a veteran peshmerga commander.

"If the political climate is not ripe, perhaps we will have to wait years. Otherwise it will be a misadventure," he added, echoing the caution of several leaders who spoke to Reuters.

As it has for a decade, the threat alone of secession may offer greater benefits to the Kurds in the three-way bargaining with Shi'ites and Sunnis that has defined post-Saddam politics.

The five million Iraqi Kurds, who are mostly Sunni Muslim by religion but define themselves by their language and culture, already enjoy wide autonomy, running their own armed forces and, to the annoyance of Baghdad, starting to export their own oil.

Hostility from Turkey, which fought its own Kurdish revolt for decades, may no longer be the obstacle it once was to full independence for Iraqi Kurdistan.

Though wary of the impact that might have on its own Kurdish minority and officially committed to the unity of Iraq, Ankara has worked with Iraq's Kurds to buffer Turkey against the chaos to the south and become a buyer of their oil. Many Kurdish leaders are quietly confident Ankara would not block their sovereignty.

More problematic may be Iran, a sponsor of the Shi'ite parties which now hold power in Baghdad and which view Kurdish secession as a bid to grab an unfair share of Iraq's wealth.

Tehran and Ankara have long supported competing factions within Iraqi Kurdistan, factions which fought a bitter civil war almost as soon as they were free of Saddam's control in 1991. Divergent interests between Iran and Turkey make for tensions within Kurdish politics that affect attitudes to independence.

The Kurdistan Democratic Party (KDP), which leans towards Turkey, and the Patriotic Union of Kurdistan (PUK), closer to Iran, each controls separate peshmerga units and different territories within Iraqi Kurdistan.

"If you don't take care to balance the relationship between Iran and Turkey, they can spoil everything," said a senior figure in the PUK, whose leaders include Iraq's head of state, President Jalal Talabani, and Kurdistan VP Rasul.

In a mark of hostility to Kurdistan President Masoud Barzani's KDP, Iraqi-born Iranian official and Shi'ite cleric Ayatollah Mahmoud Hashemi Shahroudi, accused the KDP of being part of a Sunni conspiracy that included Turkey in support of the offensive by the Islamic State.

That was part of a plan by the KDP and Ankara to break up Iraq, he said in comments carried by an Iranian news agency.

US economic pressure

The US, to whom Kurds have long looked for aid since US air power forced Saddam's troops to quit the region in 1991, is also pressing them not to break away and has urged them to join a new Baghdad coalition with Shi'ites and Sunnis.

Many Kurds resent Washington's "one Iraq" policy and have little appetite to salvage a country they would rather not be part of. But few are willing to alienate powerful allies.

By going along with efforts to hold Iraq together, Kurdish leaders are likely to use their leverage in negotiations on a new government to extract new concessions, notably on allowing them to export oil outside the control of national authorities.

"If we can stay together, it must be on the basis of a new reality," Barzani's chief-of-staff Fuad Hussein said during a visit to Washington last week. "A new reality has to do with the fact that Kurdistan is now independent."

Baghdad slashed the Kurds' share of federal budget spending this year in retaliation for them exporting oil unilaterally, creating a financial crisis in Kurdistan that exposed the limits of the region's capacity to run its own economy.

Industry experts estimate it could take several years for the Kurds to export enough oil from their own territory to make as much money as they could otherwise reap from a share of the much greater oil revenues reaching Baghdad from southern fields.

Taking control of Kirkuk could shift that arithmetic in due course but probably not quickly enough to change the economic argument that the Kurds would do better to delay independence.

The likes of Mehdi, father of the fallen peshmerga fighter Hogir Fathi, call the cause of sovereignty one for which "we are all prepared to sacrifice ourselves". But a pragmatic Kurdish leadership may yet bide its time to see how Iraq's other groups and their foreign allies deal with the Islamist offensive.

"They are in a very good position right now," said one Western diplomat who follows Iraqi politics closely. "Going towards independence may bring more pain than gain," he added.-Reuters