The Iraqi government plans to soon start paying the salaries of Kurdish Peshmerga fighters and civil servants working for the Kurdistan Regional Government (KRG), Iraqi Prime Minister Haider al-Abadi said on Tuesday.
The semi-autonomous KRG has been struggling to pay the Peshmerga and its employees since 2014, after Baghdad stopped payments to it because of a dispute about oil-sharing revenue.
"We will soon be able to pay all the salaries of the Peshmerga and the employees of the region," Abadi told reporters.
The cost of a three-year war on Islamic State added to the Kurdistan region's financial difficulties, and Iraqi troops captured the oil region of Kirkuk from the Peshmerga two weeks ago, halving the KRG's oil income.
Paying Kurdish salaries would help defuse tensions in the northern Iraqi region, where a referendum vote in favor of Kurdish independence in September triggered economic and military retaliation from the Iraqi government.
The Peshmerga had taken over the multi-ethnic region of Kirkuk in 2014, after the Iraqi army collapsed in the face of Islamic State, preventing the militants from controlling its oil fields.