The battle for the Iraqi military camp, in the Bardarash region on the demarcation line between Kurdish- and government-controlled territories, kicked off around 11:30 am (0930 GMT) Tuesday, Kurdish fighters told AFP.

The peshmergas took advantage of a change in the Iraqi guard to advance on the camp that lies on the road to the government-held city of Mosul. US special forces had been based In a nearby village for some time.

"Iraqi morale was low. They were going to leave. We attacked them when they were changing the guard," said 35-year-old peshmerga Khidir Sultan.

The Kurds attacked from positions below the Iraqi camp, while the government troops replied with mortar and machine-gun fire. The exchanges lasted until evening.

One Kurdish fighter was killed and around 20 Iraqi soldiers surrendered. The remaining Iraqi troops pulled back over a nearby bridge to the village of Qandilan and the peshmergas took over the Shiwari position.

The US special forces later came to evaluate the situation.

"We called the Americans," said Abdullah Ahmed. "They gave us a radio so we can signal our positions. And they attacked for around 20 minutes ... The Iraqis had three or four trucks loaded with munitions. One of them was hit and caused the others to explode."

Several Iraqi soldiers were burned to death in Qandilan. The survivors pulled back 15 to 20 kilometres (10 to 12 miles) from the demarcation line.

On Wednesday morning the peshmergas finally entered Qandilan and pushed as far as 14 kilometres to the northeast of Mosul, according to local official Omar Ossan.

By the afternoon the area was full of peshmergas and Americans, on foot or in four-wheel drive vehicles, in constant contact.

The Americans made no effort to hide their presence, even when the pershmergas caught four Iraqi officers who had slipped back into Qandilan with explosives to try to blow up the bridge.

"We acted independently," said one peshmerga, who preferred not to give his name. "The Americans didn't fight. They came after the combat. In any case, we didn't need them."

There was no comment from the Americans as to whether the Kurds had indeed acted alone or were encouraged by the US forces in Iraqi Kurdistan who may be preparing to open a second front in the war to topple Saddam Hussein.

About 1,000 special forces and 2,000 US troops are now believed to be operating in northern Iraq.

On Wednesday evening the peshmergas were continuing their inspection of Shiwari camp. The bunkers and housing quarters had evidently been evacuated in a hurry.

Scattered around were tables, chairs, bottles of oil, sheets of paper, an oven and an ice-box.

WAR.WIRE