Any hopes that Iraq’s politicians might quickly forge an agreement and pull the country out of crisis were dashed Tuesday when Sunni Muslim and Kurdish lawmakers walked out of the country’s newly elected parliament and the Iraqi Kurds’ leader said he plans to hold a vote on independence, opening the door to a breakup of Iraq.

The referendum announcement by Massoud Barzani, president of the semi-autonomous Iraqi Kurdistan, represents a snub to the Obama administration, which has been urging the Kurds not to seek independence.

Last week, Secretary of State John Kerry on a visit to Erbil, the capital of Iraqi Kurdistan, urged Kurdish leaders to throw in their lot with Baghdad and proactively assist Iraq’s Shia-dominated central government to combat a jihadist-led Sunni insurgency sweeping across northern and western Iraq.

With the Kurds now seizing the moment to break free and U.S. efforts to persuade Iraq’s beleaguered prime minister, Nouri al-Maliki, to form a unity government failing, the Obama administration’s policy of encouraging political reconciliation in Iraq appears to have hit a dead end.

U.S. officials had hoped that the first session of Iraq’s new parliament would see the Iran-backed al-Maliki bow to pressure from Western and Arab governments and start the process of forming a more inclusive government and name a successor. But after behind-the-scenes squabbling and less than an hour of debate, nearly a hundred lawmakers failed to return after a break, forcing a weeklong recess because of a lack of quorum.

Sunni and Kurdish politicians accused al-Maliki of not being serious about forming a more inclusive government and complained of the failure of the Shia majority to name a prime minister to replace al-Maliki. “If there is a new policy with a new prime minister, we will deal with them positively, otherwise the country will go from bad to worse,” warned Osama al-Nujaifi, a Sunni politician.

Shia politicians blamed the Sunnis and Kurds for the impasse, accusing the Kurds of betrayal for taking down Iraqi flags in Kurdistan. One Shia politician, Kadhim al-Sayadi, warned the Kurds during the ill-tempered debate, “The day will come when we will crush your heads.”

Later, announcing a Kurdish independence vote during an interview with the BBC, Barzani said a referendum would only confirm what is clear already—namely that Iraq has been “effectively partitioned now” following the territorial gains by the self-declared Islamic State (IS), formerly known as ISIS, the al Qaeda offshoot which has proclaimed an Islamic caliphate in Iraq and Syria.

He added: “Are we supposed to stay in this tragic situation the country’s living? It’s not me who will decide on independence. It’s the people. We’ll hold a referendum and it’s a matter of months.”

The Kurdish leader’s remarks drew a sharp denunciation from the central government in Baghdad, which dubbed the planned referendum unlawful. But with Iraq’s security forces in disarray and unable to roll back the Sunni insurgency, there is little Baghdad can do to stop the Kurds from breaking away, unless it receives grater military assistance from Iran.

U.S. officials fear Kurdish secession will trigger wider sectarian fighting and fan the flames of regional conflict. “Iraqi unity is important not just for the country itself—a breakup will see Iraq’s neighbors competing for influence and spark even more conflict,” a senior U.S. national security official told The Daily Beast.

In the past 24 hours Obama administration officials, who knew a referendum announcement was coming, have been lobbying Israel and Turkey to back off from embracing Kurdish statehood, say Turkish officials, who asked not to be named for this article.

During the weekend a defiant Israeli Prime Minister Benjamin Netanyahu said he welcomed the emergence of an independent Kurdish state in northern Iraq; and top Turkish officials said Kurdish independence was a “foregone conclusion,” arguing no one had the right to tell the Kurds they should forgo statehood. Turkey and Iraqi Kurdistan have enjoyed warming ties in recent years to the consternation of Iran.

But immediately following Barzani’s comments, Israeli officials played down Netanyahu’s enthusiasm over the prospect of Kurdish statehood. Israeli Foreign Minister Avigdor Lieberman said the Israeli government was not lobbying for the Kurds and wouldn’t help them achieve independence, although he added that Israel saw Iraqi Kurdish independence as a fait accompli.

And Turkish officials also walked back their earlier comments, saying they were opposed to Kurdish statehood and favored a unity government in Baghdad to counter the threat of the Sunni insurgency.

But it isn’t clear that Washington can rely on either the Turkish or Israeli governments to rebuff the Kurds. Officials from both countries argue that events are fast overtaking the Obama administration.

No formal response was immediately forthcoming from Tehran to Barzani’s announcement but last week the Iranian government warned the Kurds it would not tolerate the establishment of an independent Kurdish state. Iran has deployed possibly hundreds of Revolutionary Guardsmen to help Iraqi security forces combat Sunni militants.

In recent days, officials in Tehran have become more vociferous in their complaints about the Kurds focusing on defending their own territory and not assisting Iraqi security forces in trying to stem the advance of Sunni militants, who have seized a large swath of northern and western Iraq, including the country’s second-largest city, Mosul.

As if to stress the point, the Iranian army shelled for three days Kurdish villages along the border after clashes with Iranian Kurdish separatists. More than 10 million Kurds live in Iran and Tehran fears Iraqi Kurdish statehood will encourage unrest among their own Kurds.

If Iraq’s 6 million Kurds do break away, a flashpoint for conflict with Baghdad and Shia Muslims is likely to come over the future of the disputed oil-rich territory of Kirkuk, which the Kurds see as their historic capital. With the collapse of the Iraqi army in the face of the Sunni insurgency, Kurdish Peshmerga forces now control Kirkuk and they vow they will maintain their hold there until the people of Kirkuk also have the opportunity to vote on whether to join Kurdistan.