ARBIL: Iraqi Kurds on Saturday began casting their ballots in presidential and parliamentary polls being held as the region grapples with a land dispute with Baghdad and tensions over oil exports.

Queues had already formed at polling stations in the region's two main cities, Arbil and Sulaimaniyah, when voting opened at 8:00 am (0500 GMT).

Incumbent regional president Massud Barzani is widely tipped to be re-elected while his Kurdistan Democratic Party (KDP) and Iraqi President Jalal Talabani's Patriotic Union of Kurdistan (PUK) are expected to sweep the parliamentary poll.

More than 2.5 million Kurds are eligible to vote in the poll being held throughout the Kurdish region of northern Iraq.

The two main former rebel factions, which have dominated local politics for decades, have presented a joint list, including many new candidates. But they face several challengers seeking to break their stranglehold.

Talabani and opposition party leader Nusherwan Mustafa cast their votes in Iraqi Kurdistan's second city of Sulaimaniyah, an AFP correspondent said.

Saturday's main vote -- more than 100,000 Kurdish members of Iraq's armed forces voted on Thursday, along with police, prisoners and the sick -- is being held six months after the rest of Iraq held provincial elections.

Polling stations are due to close at 6:00 pm (1500 GMT).

Final results are not expected for several days, however, as ballots must be collected in the regional capital Arbil before being transported to Baghdad for the count.

Tensions have heightened in the run-up to the vote between Barzani and the central government of Prime Minister Nuri al-Maliki over Kurdish claims to 16 disputed areas, including oil-rich Kirkuk, and parts of three historically Kurdish-populated provinces -- Diyala, Nineveh and Salaheddin.

During a visit to Washington on Thursday, Maliki acknowledged that these tensions were among "the most dangerous issues that have been a concern for all the Iraqi government."

But he said he expected to resolve the standoff. "I am confident that we will be able to resolve all these issues not only with the Kurdistan region but also with other provinces," Maliki said.

During the US-led invasion of 2003, Kurdish peshmerga rebels who had fought the regime of ousted dictator Saddam Hussein occupied many of the disputed areas.

The former rebels are now deployed alongside Iraqi army soldiers, triggering a tense face-off that has raised the prospect of armed conflict.

Barzani has insisted he will not "compromise" on the longstanding claims to Kirkuk and wants the issue to be settled by a referendum called for under the Iraqi constitution, despite opposition from Arab and Turkmen residents.

Dyandar Zebari, who coordinates the Kurdish regional government's relations with the United Nations, said the next administration will also have to reach a deal with Baghdad to share energy resources from northern oilfields.

On June 1, the Kurdish administration began exporting oil for the first time, but Baghdad is contesting the region's right to sign contracts without central government approval.

Disagreements over oil rights have hamstrung exploitation of much of Iraq's massive proven reserves and long-delayed hydrocarbons law, prompting fierce Kurdish criticism.

Kurds are also increasingly concerned about corruption, with many voicing support for change after decades of PUK and KDP dominance.

Independent candidates like Mustafa, a wealthy entrepreneur and former PUK deputy leader, are working to break the PUK-KDP monopoly.

"We think that Kurdish society, after a political stabilisation, now needs economic, social and cultural reforms," said Mustafa, head of the Change List.

Five candidates have registered for the presidential race, including Barzani, while 24 political lists will contest the 111 seats in the assembly which first convened in 1992.

For the first time the regional president will be elected by popular vote in Iraqi Kurdistan, which covers the provinces of Arbil, Dohuk and Sulaimaniyah and has its own flag, national anthem and national day.