Story highlights Concerned Washington urges all parties "to avoid provocations"

At least 16 Kurdish fighters killed, Peshmerga commanders say

(CNN) Iraqi security forces took direct control of the strategic city of Kirkuk, driving hundreds of families from the oil-rich territory that had been under Kurdish control for more than two years, security sources and witnesses told CNN.

The forces entered the disputed city on Monday and set up checkpoints around its perimeter, while witnesses saw a sole Iraqi flag flying atop the governor's headquarters. The building usually holds both the Kurdish and Iraqi flags.

The breach of the city came after Iraqi forces pushed through two fronts on Kirkuk's outskirts, seizing key oil fields and a military base, among other valuable assets. Iraqi counterterrorism forces earlier Monday said they would not enter the city proper.

The operation was ordered by Iraqi Prime Minister Haider al-Abadi, who sent federal forces to the region to impose security and called on Kurdish Peshmerga forces to cooperate with them. The majority of local Kirkuk police have remained and are working with federal officers.

His order came just weeks after a Kurdish referendum for independence claimed Kirkuk as their own, causing consternation in Baghdad. The city -- among the most coveted of disputed territories in the region -- falls outside the internationally recognized autonomous Kurdish region in the northwest of Iraq.

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