TIME Magazine

A Kurdish family celebrates Nowruz, a holiday marking the Kurdish New Year and the start of spring. Since 2003, no U.S troops have been killed in Kurdish Iraq. Kate Brooks/Polaris for TIMELIKE RESIDENTS OF BERLIN DURING THE AIRLIFT, inhabitants of Arbil--capital of the Kurdish enclave in northern Iraq--get a little flutter in their hearts when they see a plane coming in to land. Built after the fall of Saddam Hussein's regime, Arbil's international airport is a symbol to Kurds that their years of isolation as an oppressed ethnic minority are over and that the Kurdish region, unlike the rest of Iraq, is open for business. Passengers flying into Baghdad have to endure a corkscrew landing to avoid possible surface-to-air missiles. But a trip to Arbil is so safe that on my flight I was the only passenger packing body armor. When I arrived, my biggest problem was the $50 fare charged for a 10-minute cab ride by the drivers of Hello Taxi--and finding a room at one of the city's packed hotels.Such is life in Iraqi Kurdistan, the last beacon of stability amid the wreckage of the U.S. enterprise in Iraq. Of course, stability is a relative term. True, the airport is putting in a runway long enough to accommodate jumbo jets, but for now it will be used mainly for U.S. military flights. That's because only one Western carrier--Austrian Airlines--is brave enough to land there. Other flights are run by off-brand charters with names like Flying Carpet and Middle Eastern carriers like Iraqi Airways. And even those are unreliable. Many of the officials at Iraqi Airways are former Baathists who deliberately try to delay flights. Flights from Turkey often get canceled when there's a public dispute between Kurdish and Turkish politicians. And all flights in and out of Kurdish Iraq still have to receive clearance from both the civil-aviation authority in Baghdad and the American air base in Qatar.Iraqi Kurds have been in control of their region since 1991, when, with the help of the U.S.-enforced no-fly zone, they drove Saddam's forces out of northern Iraq. But now, four years after the liberation of the rest of the country, Kurdish Iraq is undergoing an identity crisis. On the one hand, it is a rare success story in the Middle East: a stable territory run by a secular leadership committed to economic and political reform and sitting on a huge pool of oil. On the other hand, it is tiny and landlocked, uncomfortably attached to a war-ravaged nation and surrounded by unfriendly neighbors. Despite the region's outward signs of tranquillity, the fate of Kurdistan--whether it will continue as an inspiring example of what the rest of Iraq could look like or become engulfed by the country's violence--remains unresolved, dependent as much on what happens to the barely functioning Iraqi state as on the Kurds.For the Bush Administration, the central question is how long the Kurds can be persuaded to remain part of a united Iraq. The overwhelming majority of Kurds would like to break free of Iraq and form an independent nation. So far, Kurdish leaders have been a constructive force in holding Iraq together, helping to write and adopt a national constitution that, although it gave great powers to the regions, has kept Iraq intact as a federal state. Kurds are serving at the highest levels of the Iraqi government, including as President, Foreign Minister and Deputy Prime Minister.But it's doubtful that spirit of cooperation will last. The further that Iraq slides into civil war, the more the Kurds will want to insulate themselves from it, by carving out more political and economic autonomy. Even if they stop short of outright secession, the Kurds could still unleash new conflicts in Iraq if their impatience with the fecklessness of the Baghdad government prompts them to take action on their own. The most explosive flashpoint is Kirkuk, the disputed oil-rich city that the Kurds lay claim to. As Iraq's Kurdish President, Massoud Barzani, said on March 22 during the farewell visit of departing U.S. Ambassador Zalmay Khalilzad, "Our patience is not unlimited." So what happens to Iraq when it runs out?WHEN I FIRST TRAVELED TO THE KURDISH north in August 2004 to escape the heat and violence of Baghdad, the so-called Switzerland of Iraq was disappointing in one respect: summers on the high plains of Arbil are almost as scorching. Otherwise, Kurdistan was a refuge. In Baghdad, journalists had begun hiring security entourages and erecting guarded compounds. To the north in Arbil, as a visiting American, I was practically given the keys to the city. I did my reporting by foot or hailed taxis from the street, spent my evenings in beer gardens or pizza parlors, and slept on the roof of the house, with the sound of crickets rather than Kalashnikovs in the cooling night air.Since then the differences between Kurdistan and Iraq proper have become even more dramatic. The plains around Arbil--once a glaring semidesert wasteland--are exploding with luxury housing developments. They have names like British Village, which resembles a gated California suburb, and Dream City, which supposedly will have its own conference center, supermarket and American-style school. The Turkish developers of Naz City, a high-rise condominium complex, are trying to sell house-proud Kurds on modern apartment living. An American company wants to build Iraq's first ski resort in the mountains near the Turkish and Iranian borders. While citizens in Baghdad struggle to survive, a sign in Arbil declares that the city is "striving for perfection."The Kurds' most important achievement has been to keep their region free of Iraq's insurgency and sectarian warfare, thanks to their army of 70,000 peshmerga soldiers. Not a single American soldier has been killed in Kurdistan since the start of the war in Iraq, and there hasn't been a major terrorist attack in Arbil since June 2005.Take a walk, however, in any of this city's safe and prosperous neighborhoods, and you will quickly see that the other Iraq isn't so far away. Some 150,000 displaced Iraqi Arabs have taken refuge in Kurdistan from the conflict in the central and southern parts of the country. Kurdish officials require Iraqi Arabs trying to enter Kurdistan to have a Kurdish resident vouch for their character. As a result, the Arab refugee population is largely middle class, with a preponderance of doctors, lawyers and other professionals.But as the number of newcomers swells, tensions are rising. Not many Kurds have forgotten the years of repression by Iraq's Arab majority, and many now blame Arabs for rising home prices. While I was waiting to speak to the president of Salahaddin University in Arbil, which has added some 200 Arab professors to its faculty, a visiting Kurdish archaeologist offered his expert opinion on the subject. "From Muhammad until now, Arabs are rotten to the bone," he said, "even when they are being friendly to you." Non-Kurdish Iraqis, for their part, resent being treated as second-class citizens in Kurdish Iraq. "Why do I need permission to live in my own country?" said Walaa Matti, an Assyrian Christian who fled his home in Mosul and works in the business center of a hotel in Arbil. "I'm Iraqi, and this is my country, but I feel like a stranger."The Kurds' tenuous relationship with Arab Iraq is even more combustible some 47 miles south, in Kirkuk. The city is less than a two-hour drive from Arbil, but the road trip into the other Iraq is a spooky one. To the left, there's a chain of forts left over from the Iran-Iraq war, crumbling masonry monsters that look as if they were built to World War I specifications. The Hamreen Mountains to the right are practically deserted save for a series of sentry posts silhouetted along the ridge line. And waiting straight ahead at the gates of Kirkuk is a natural-gas flare, an eternal flame that the locals call Babagurgur, which is the symbol of this oil-rich city.Kirkuk, with its mixed population of Kurds, Arabs and Turkomans, has long had the potential to be a sectarian powder keg. Under Saddam's Baathist regime, the Iraqi government forced out a large number of the city's majority Kurdish population and resettled the city with Arabs from the south. Now ethnic tensions are erupting as Kurds demand the return of Kirkuk to their control. The day I visited in March, a series of two car bombs and three roadside bombs killed 18 people. On April 1, at least 15 people, including eight schoolchildren, died in a suicide truck bombing.The violence in this city of about 1 million people hasn't reached a level comparable to that in Baghdad. Infrastructure and services in the city are functional by Iraqi standards despite the central government, which delays projects by sheer inertia, say U.S. and Kurdish officials. Such neglect may soon reach a crisis point in Kirkuk. The Iraqi constitution calls for the city to hold a referendum by year's end on whether it should remain under the control of the central Iraqi government in Baghdad or become part of Iraqi Kurdistan.A growing number of voices outside Iraq--including the Baker-Hamilton commission--have called for the contentious issue to be shelved. But Kurdish leaders say further delay only increases the chance that the political process for settling the Kirkuk issue will turn into an ethnic struggle. Kirkuk is a major staging ground for Arab insurgents trying to infiltrate Kurdistan, and Kurds say they could do a better job than the Iraqi government of maintaining security there. "If we had control of Kirkuk, we could clean it out in two months," said Abdullah Ali Muhammad, head of Kurdish security forces in Arbil. Other Kurdish officials warn that if the referendum is delayed, Kurds forced out of Kirkuk by the old regime's ethnic-cleansing program would try to return on their own. If that happens and if the Iraqi government hasn't moved out the "new" Arabs transplanted there under Saddam, "there will be civil war," according to Kamal Kirkuki, vice president of the Kurdistan Parliament and head of a committee overseeing territorial disputes. Delay would give insurgents that much longer to set off car bombs and push the city closer to Baghdad-style sectarian revenge killings.And that's just the beginning. U.S. officials and Kurdish leaders know that unilateral moves by Kurds--to take Kirkuk on their own or drop out of the Iraqi government--would not only provoke the ire of Iraq's Arab majority but also risk intervention by Iraq's neighbors, such as Turkey, Iran and Syria, which all have restive Kurdish minorities of their own. Turkey, for instance, would likely shut the borders with Kurdistan and stop all flights coming in from over its airspace. Of all the problems that would follow, the most ironic could be that a newly independent oil-rich Kurdistan, without any refineries or pipelines, would run out of gas. Falah Mustafa Bakir, head of the Kurdish government's office of foreign relations, told me that declaring independence would be "political suicide."But even that worst-case scenario might not be enough to dissuade the popular clamor inside Kurdistan for more assertive action. Just four years since the fall of Saddam, most Kurds may be willing to remain a part of Iraq for now, but few want their destinies to remain tied to a poor, failing state beset by sectarian carnage. Over time, the push for a free and independent Kurdistan may become irresistible. In a bid to manage expectations, the Kurdish leadership is putting out a new party line, echoed in mosques and newspaper editorials: "Be grateful." But as Americans have learned in Iraq, gratitude is a wasting asset.