ALEPPO, Syria (Reuters) - Kurdish fighters wearing the blue eagle insignia of the Asayish security force stopped the taxi entering the Sheikh Maqsoud district in Aleppo, checking papers and searching for contraband.

When they waved it on into the Kurdish-controlled district, it stayed inside the city while leaving, in effect, the Syrian Arab Republic of President Bashar al-Assad.

Inside Sheikh Maqsoud, Kurdish banners flutter from the rooftops and Assad’s image is replaced by that of a Kurdish leader.

“We won’t give up Sheikh Maqsoud unless they kill us all,” said Souad Hassan, a senior Kurdish politician.

That the government tolerates Kurdish rule in the enclave, generally allowing movement in and out, shows its willingness to accept, for now, a Kurdish movement whose vision for Syria directly rivals its own, but which is not an immediate enemy.

But friction between Sheikh Maqsoud - population 40,000 - and the government points to potential future problems.

It is an uneasy relationship, complicated by a web of international alliances and enmities, that will grow more important as both sides seize more ground from Islamic State.

Assad’s government trumpeted the defeat of rebels in Aleppo as his greatest victory of the war so far, the return of state control to a city that was once the country’s biggest.

But he has made no move to regain Sheikh Maqsoud, which sits on a hilltop surrounded by areas held by the army.

There is no military presence around the district except a Syrian army checkpoint on the road in. Many government workers and students inside Sheikh Maqsoud commute daily into the city.

Still, Asayish leaders there complained to Reuters that government checkpoints hinder the movement of goods and services into Sheikh Maqsoud.

LEFTIST IDEOLOGY

In an upstairs room of the local “Democratic Community Academy”, 15 men and women, note pads and pens on their laps, attended a lecture on the YPG’s leftist, federalist ideology.

A woman rose to speak and the man and woman giving the course nodded approvingly before correcting a point of doctrine.

A wall-sized photograph of Abdullah Ocalan, founder of the PKK in Turkey, and political lodestar of the YPG and the main Syrian Kurdish political party, the PYD, dominated the room.

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Graffiti in Sheikh Maqsoud included several references to the PKK and to “Apo”, as Ocalan is known. Street posters of martyrs included not just those killed with the YPG in Syria, but some who had died fighting for the PKK in Turkey.

Those ties to the PKK alarm Turkish President Tayyip Erdogan, whose intervention in Syria is based partly on stopping a Kurdish mini-state emerging along the border.

They have also complicated the YPG’s relationship with the United States, which backs it as the spearhead of its fight against Islamic State in Syria, but which regards the PKK as a terrorist organization.

The Kurds have forsworn independence from Syria. Instead they want a decentralized state in which communities elect local councils, led by both men and women, with representation from all ethnic and religious groups.

Critics say the governing structures they have set up under this model in northern Syria are less democratic than they appear, and are dominated by officials committed to the PKK.

Still, their vision is at odds with Assad’s Syrian state, which is highly centralized and emphasizes the country’s Arab roots.

Syrian Foreign Minister Walid al-Moualem has suggested that an “accommodation” could be reached with the Kurds, and Assad has indicated he accepts their bearing arms for now.

But Assad has also vowed to take back “every inch” of the country and described Kurdish governing bodies as “temporary structures”.

FIGHTING

One reason for Assad’s tolerance of the YPG is clear: its enmity with rebel groups that are his own main foe.

The Kurds’ front against the rebels helped Assad when his forces retook east Aleppo last year. Their fight against Islamic State has also deprived the jihadists of resources they might have used against the Syrian government.

The Syrian government has also benefited from Turkish anxiety about the YPG’s links to the PKK. Ankara’s involvement in Syria, where it was a main supporter of rebels, is now focused on containing Kurdish influence.

The Kurds have allowed government enclaves to persist near Hasaka and Qamishli, two cities they control in northeast Syria, but they have also clashed with the army there.

Reuters visited Sheikh Maqsoud with a Syrian government official and was escorted by a truck of Asayish soldiers.

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Mohammed Ali, the head of the Asayish in Sheikh Maqsoud, was very critical of the Syrian government, saying it often obstructed passage between Sheikh Maqsoud and other areas, blocking humanitarian supplies.

“This is wrong behavior by the Syrian government. It looks at Sheikh Maqsoud as if it is a military area, not a civilian one,” he said.

Reuters did not see any of the Kurdish YPG militia fighters in Sheikh Maqsoud, only the armed security service the Asayish, although YPG flags were flying.

CHECKPOINTS

There are only two primary schools and no high schools in Sheikh Maqsoud, Ali said. Older children and people in the district with jobs in other parts of Aleppo must commute into government territory.

However, he said the checkpoint was only open from 8am-5pm in summer and until 3pm in winter. Reuters saw some traffic cross later than this.

All supplies including food, medicine and diesel for electricity generators - needed to power pumps to raise water from wells - come from outside.

Produce in Sheikh Maqsoud street stalls was all purchased from the central Aleppo fruit and vegetable market each morning, the barrow men said - but charged 50 lira ($0.10) per kilo by the checkpoint soldiers.

Sheikh Maqsoud is about 17km (10 miles) from the nearest Kurdish-run territory in Syria - Afrin. Civilians are able to pass without much difficulty, but Kurdish fighters are not. Young men risk forcible conscription at army checkpoints.

The checkpoints sometimes refused shipments attempting to enter Sheikh Maqsoud without warning and seemingly without reason, Ali said, noting a recent diesel shipment denied entry.

Heavy trucks and construction machinery, such as bulldozers, required to lift the rubble in badly damaged areas were also forbidden entrance, he added.

DEPENDENCE

In the main ward of Sheikh Maqsoud’s only clinic, a former school, a motionless soldier and an old man lay on two of the four chipped metal beds.

A plastic cupboard against one wall was untidily piled with old medical equipment and supplies. A half-full plastic bin bag lay open in a corner with discarded surgical gloves inside.

The hospital cannot perform surgery under anesthetic and usually just provides first aid before moving patients to private hospitals in government-held Aleppo.

This apparent dependence on links to government areas is reflected in other Kurdish areas in Syria, where their other borders, with Turkey and Iraq, are hostile.

There was no sign in Sheikh Maqsoud of the ties between the YPG and the U.S. But Reuters saw a Russian armored vehicle slowly driving down one road.

Moscow is Assad’s biggest ally in the war but the presence of Russian forces in the Kurdish Afrin region has also helped avert possible Turkish attacks there, Kurds believe.

Still, Kurdish leaders in Sheikh Maqsoud say they see no reason to accept rule by Damascus unless their people want it.

“Around 30-40 percent of Syrian land is under our control and the will of the people is what is strongest,” said Mohammed Haj Mustafa, head of the PYD in Sheikh Maqsoud.