Beneath the ancient citadel in Iraq's Kirkuk, the flag of Kurdistan -- green, white and red stripes overlaid with a yellow sun -- flaps alongside market stalls.

The city's future has been fiercely disputed for years, with its Kurdish, Arab and Turkmen residents divided over whether it should be administered by Baghdad or the autonomous three province Kurdish region of north Iraq.

But a major offensive by of Sunni militants, led by jihadists from the Islamic State of Iraq and the Levant (ISIL), has only served to strengthen the conviction among Kurds that the city's future lies with the Kurdistan region.

They argue the Iraqi army's abandonment of its posts outside Kirkuk, and the arrival of Kurdish forces known as peshmerga, shows that only Kurdish administration will protect the city.

"The Iraqi army can't protect us, they left their weapons and ran away," says 21-year-old Ghazi Faisal, an off-duty peshmerga fighter shopping in the market.

"If they were honourable and defended us, this wouldn't have happened to the country."

Many of the city's Kurds are aware that Kirkuk's Arab and Turkmen neighbours are less keen on Kurdish assertions of control.

But they say the protection that the peshmerga is now providing may help sway those previously unconvinced.

"I think that they will see that the peshmerga have brought stability to the city and kept everyone's rights and freedoms," says Sheikh Imad, a Shiite Kurd who gives only his first name.

"What's most important here is stability and security, and they can provide that."

- Peshmerga man front line -

Before the Sunni advance, and the collapse of Iraqi army forces in the area, Kirkuk was subject to a complex security arrangement reflecting its disputed status.

Peshmerga patrolled north and east of the city, Iraqi army forces to the south and west, and both Iraqi police and the asayesh, Kurdish internal security forces, were present inside it.

Now, the Iraqi army has disappeared, the peshmerga are patrolling in all directions outside the city, and the asayesh presence inside it has been boosted significantly.

Twenty kilometres (12 miles) south of Kirkuk, on the edge of the Shiite Turkmen town of Taza Khurmatu, the peshmerga forces are arrayed along a defensive line above a river.

They man artillery, a tank and several armoured personnel carriers, some four kilometres (3 miles) from where ISIL jihadists and their allies patrol.

Back in the city, at his official residence, Kirkuk provincial Governor Najm al-Din Karim plays down the significance of the peshmerga presence.

"Kirkuk is still controlled by our asayesh, our police, which was the case before," he told AFP.

"Our peshmerga were here before this... nothing has changed."

- 'Iraq will be different' -

Karim is in a delicate position, as both a Kurd but also a governor of a province that is financed directly by Baghdad.

He says Prime Minister Nuri al-Maliki does not bear sole responsibility for the disappearance of the Iraqi army, but admits to being shocked by how quickly it withdrew.

And while he dismisses claims that Kirkuk is under the control of the Kurdish regional government, he acknowledges that the militant advance has changed the direction of Iraq, and perhaps the city's future.

"One thing is clear, Iraq will be different," he says.

"I think the only hope to keep the country together is probably through three different regions with a confederation," he says.

"This is actually what (US Vice President Joe) Biden suggested in 2004, and everybody thought that he was breaking up Iraq, but that's the only way and he was right."

In that scenario, he insists, Kirkuk's residents would choose to be part of a Kurdish region.

"The people of Kirkuk will vote for a place (where) there's peace, where they can have services," he says.

"They know that the Kurdistan region is where they can get these things."

Part of Kirkuk's allure lies in the vast oil reserves in the province.

Karim will not be drawn on the future of the reserves, saying it is an issue to be worked out down the line, but Kurdish residents of Kirkuk are less equivocal.

"The rights to Kirkuk's oil are shared between the Kurdish government and the central government, but the government abandoned the situation, abandoned the region, abandoned the people," says 28-year-old construction worker Ithar Subhan.

"They lost their rights (to the oil) when the Iraqi army left, when they failed to carry out their duties."