The Kurdistan Regional Government (KRG) said yesterday that it would respect the Iraqi Supreme Federal Court's decision that prohibits the region from seceding, indicating that it could be the possible basis for inclusive dialogue between Irbil and Baghdad.
In a statement issued on Tuesday, the Kurdish regional government says "we respect" the November 6 decision by the Supreme Federal Court, an indication they may be willing to back down in the standoff with Baghdad. "This is the only way to secure the unity of Iraq", It added.
The Baghdad government responded to the Kurdish independence referendum by swiftly seizing the Kurdish-held city of Kirkuk and other territory disputed between the Kurds and the central government. Its decisions can not be appealed, although it has no mechanism to enforce its ruling in the KRG.
Abadi brought up the economic recession in the country and asserted that the central government was "serious" about public-sector salary payments.
The reversal of the bank restrictions signals a step towards de-escalating a conflict between Baghdad and the Kurdish region that erupted after the Kurds held a referendum on independence in September. Neighboring Turkey and Iran, which have their own Kurdish minorities, also strongly decried the Iraqi Kurdish independence vote.
USA president Donald Trump's special envoy to the anti-ISIL coalition, Brett McGurk, on Tuesday praised Erbil's efforts in trying to resolve the dispute.
The federal government, led by Haidar al-Abadi, assured Iraqi Kurdistan that the constitutional rights of the Kurdish people would not be violated and that the government wouldn't deal directly with the provinces; instead it would respect the current Kurdish entity as stipulated by the Iraqi constitution.
But on Monday, Mr Barzani accused Baghdad of attempting to abolish the Kurdish region and "rejecting calls for dialogue". Erbil, Sulaimaniya and Dahuk are provinces of an independent region, whose borders have been determined by the constitution.
He urged Washington to "balance its relations with the two sides and to set the stage for constructive dialogue".