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More than 1,000 Kurdish career soldiers in Iraq's army have deserted and want to be integrated into forces loyal to the autonomous Kurdistan region, a heavy blow to the country's stretched armed forces.
The move comes after the Kurdish troops disobeyed orders to take part in an operation ordered by the Shiite-led authorities against a mainly Sunni Arab town.
If their request is fulfilled, such a mass defection would be a major loss to Iraq's security forces as they grapple with a surge in violence that has sparked fears of renewed sectarian bloodshed.
Two officials said the 1,070 Kurdish members of the Iraqi army's 16th Brigade mutinied when gunmen took control of a northern town in April, and subsequently declined to attend disciplinary re-training.
The soldiers were no longer receiving salaries or rations from the Iraqi army, nor were they following any orders from federal forces, according to the mayor of the town where they are based.
His comments were echoed by the spokesman for the Kurdish ministry responsible for peshmerga forces, the former rebel militia that is now part of Kurdistan's security forces.
But the officials differed as to whether the soldiers' request to join the peshmerga had been met.
The troops had been assigned to the ethnically-mixed towns of Tuz Khurmatu and Sulaiman Bek, the latter of which briefly fell to gunmen in April.
According to Tuz Mayor Shallal Abdul, they stood accused of refusing to follow orders as Sulaiman Bek, a mostly-Arab town, was overrun.
As punishment, they were ordered to attend re-training. Three senior Kurdish officers were also replaced with Arabs, Abdul said.
The troops did not follow orders to stay and defend the town against the Sunni Arab gunmen because they did not want to further raise tensions between Arabs and Kurds in a swathe of disputed territory claimed by both the central government and Kurdish authorities.
"The forces ... are still deployed to their positions, but they are receiving their salaries and orders from the peshmerga ministry," Abdul told AFP.
Peshmerga ministry spokesman Halkurd Mullah Ali confirmed that the soldiers were not carrying out Baghdad's orders, and added that Kurdish authorities were providing rations because officials "sympathised with them".
But he denied that the soldiers were receiving either wages or orders from peshmerga commanders.
"We will discuss their situation with the joint security committee (of the Baghdad government and the autonomous Kurdish regional administration)," he said.
"If we do not reach an agreement with Baghdad about them, we are ready to integrate them into peshmerga forces."
The mass defection comes at a crucial time for Iraq's security forces, which are dealing with a massive spike in violence, months of protests in Sunni Arab provinces, and fears of spillover from the conflict in neighbouring Syria.
Last month, more than 1,000 people were killed in violence according to the United Nations, the highest toll since 2008, and attacks on Monday left 78 people dead.
"This happens in places where you have a severe division of loyalties," warned John Drake, an Iraq analyst for risk consultancy firm AKE Group, referring to the potential defection of the Kurdish troops.
"These tensions are being driven by ethnic and sectarian identity, so when you have got community identity having more of an impact on your job and your efforts to enforce security, you are not going to be an effective force."
He added that it seemed as though "employees of the government -- because that is what they are -- feel that the situation is out of control, and they are resorting to insubordination.
"That would be a worrying sign. It would indicate a lack of belief in the state."