Warnings of a major attack by Iraqi government forces and Iranian-trained militias against Iraqi Kurdistan escalated tensions and led to Kurdish forces closing some roads temporarily.
Tensions between the KRG and the Iraqi government have been running especially high since the Iraqi Kurds overwhelmingly voted for independence in a referendum last month.
But an Iraqi military spokesman denied any attack on Kurdish forces was planned and said that government troops were instead preparing to oust Islamic State militants from a border area with Syria in the west of Iraq.
Kurdish forces closed two important roads, to Dohuk and Mosul for a few hours.
A Kurdish official told AFP that the road closures were prompted by fear of a possible attack on disputes areas held by Kurdish forces.
The oil rich Kirkuk is one such area, with ethnically mixed population that Iraqi Kurds claim.
Iraqi forces and Shi'ite paramilitaries, known as Popular Mobilization, are deployed south and west of Kirkuk, in areas previously under the control of Islamic State.
In the meantime, The Kurdistan Regional Government offered talks with Iraqi authorities on the status of Kurdish airports, border posts and banks, on which the central government put restrictions following the independence referendum.
The government in Baghdad, which declared the vote illegal, imposed a ban on direct international flights to the northern region. It also demanded that the KRG hand over control of its border posts, and stopped selling dollars to four Kurdish-owned banks.
"To avoid this collective punishment, we invite (Iraqi Prime Minister) Haider al-Abadi, again, that we ready to any from of dialogue and negotiations in conformity with the Iraqi Constitution," the KRG said a statement published overnight.
It offered discussions "regarding the crossings, internal trade, providing services to the citizens, the banks and the airports."
The statement marked a change of tack by Kurdish authorities, which on Wednesday accused Iraqi forces and Iranian-trained Iraqi paramilitaries of "preparing a major attack" on the oil-rich region of Kirkuk and near Mosul in northern Iraq.
Reporting by Reuters, AFP