Sulaimaniyah, Iraq - The presidents of Iraq and Iraqi Kurdistan held talks on Sunday to defuse an escalating crisis, after a deadline for Kurdish forces to withdraw from disputed positions was extended by 24 hours.Thousands of Iraqi troops are locked in an armed stand-off with Kurdish peshmerga fighters in the oil-rich province of Kirkuk, amid spiralling tensions following last month's vote by the Iraqi Kurds for independence.The crisis is raising fears of fresh chaos in Iraq just as the country's forces are on the verge of routing the Islamic State group from the last territory it controls in the country.Kurdish forces, who were key allies in the US-backed offensive against ISIS, are refusing to surrender positions they took during the fightback against the jihadists over the past three years.Iraq's central authorities had demanded the Kurds withdraw from disputed areas overnight but the deadline was extended by a day following talks.Iraqi President Fuad Masum, himself a Kurd, was meeting on Sunday with Iraqi Kurd leader Massud Barzani in Dukan in Sulaimaniyah province, officials said.The peshmerga forces based in Kirkuk are mainly loyal to Masum's Patriotic Union of Kurdistan (PUK) of party, a rival of Barzani's Kurdistan Democratic Party (KDP). Representatives of both parties were taking part in the talks.The Iraqi president was to submit a plan based on "dialogue and negotiation to avoid conflict and violence," Abdallah Aliwai, an adviser to Masum at the talks, told AFP, refusing to give more details.Iraqi and peshmerga forces could be seen early on Sunday still facing off in positions on the outskirts of Kirkuk, though there were no signs of troop movements.Armed civilians in Kirkuk As well as heavily armed federal troops, members of the Hashed al-Shaabi, or Popular Mobilisation forces, which are dominated by Iran-backed Shiite militias, have massed around Kirkuk.Armed Kurdish civilians were seen gathering in Kirkuk overnight and Kirkuk governor Najm Eddine Karim, a Kurd sacked by Baghdad but who refuses to quit his post, warned: "Residents will help the peshmerga... we will not allow any force to enter our city."Kirkuk, long claimed by the Kurds as part of their historic territory, has emerged as the main flashpoint in the dispute.Polling during the September 25 referendum was held not only in the three provinces of the autonomous Kurdish region but also in adjacent Kurdish-held areas, including Kirkuk, that are claimed by both Baghdad and Iraqi Kurdistan.The referendum, which was non-binding and saw voters overwhelmingly back independence, was declared illegal by Baghdad and held despite international opposition.The Kurds control the city of Kirkuk and three major oil fields in the province.The three fields produce some 250 000 barrels per day, accounting for 40% of Iraqi Kurdistan's oil exports. They would provide crucial revenue to Baghdad, which has been left cash-strapped from the global fall in oil prices and three years of battle against ISIS. Iraqi Prime Minister Haider al-Abadi said this week that he was "not going... to make war on our Kurdish citizens" but has also rejected any negotiations until the independence vote is annulled.US urges calm Abadi's spokesperson Saad al-Hadithi told AFP that Iraqi government forces "do not want to... harm citizens, be they Kurdish or otherwise, but they must enforce the constitution," which gives Baghdad control in the disputed areas and over exports.Washington has military advisers deployed with both sides in the stand-off and Defence Secretary Jim Mattis said on Friday the United States was working to reduce tensions."We are trying to tone everything down and to figure out how we go forward without losing sight of the enemy," Mattis told reporters."Everybody stay focused on defeating ISIS. We can't turn on each other right now," he said, using an alternative acronym for IS.After ousting the jihadists from their last urban areas including Mosul and Hawija in recent months, Iraqi forces are battling to push IS from its last positions along the border with Syria.Tensions have also risen between the Kurds and Ankara and Tehran since the independence vote, which both countries fear will stoke the separatist ambitions of their own sizeable Kurdish minorities.On Sunday, Tehran denied a claim from a Kurdish official that Iran had followed through on threats to close its border with Iraqi Kurdistan.Iranian foreign ministry spokesperson Bahram Ghassemi said "no new decision" had been made and that "the land border is open with Iraqi Kurdistan".A Kurdish customs official, Shakhwan Abu Bakr, earlier told AFP that the border had been closed to all people and goods at the three crossings into Iran.