Iraqi Kurds may have long dreamed of founding their own state, but the independence referendum set for September 25 has also exposed divisions between their autonomous region's main cities.

In Arbil, capital of the Kurdish Regional Government, the streets are currently teeming with red, white and green Kurdish flags.

Some people have even resprayed their cars with the same colours and altered their registration plates to read "Kurdistan" instead of "Iraq".

Most of the million or so residents of the city, a stronghold of Kurdish leader Massud Barzani who initiated the poll, back the independence drive.

Many even say the vote should have been held years ago, given that the region has been de facto autonomous since 1991.

But 150 kilometres (90 miles) to the southeast in Sulaimaniyah, a bastion of opposition to Barzani, there is little enthusiasm for the vote despite broad support for independence itself.

"Why hold a referendum when the foundation to build a state doesn't exist?" asked teacher Rizkar Abdel Qader, 46.

"Our officials would do better to improve the quality of life for people before calling for the creation of a state."

Hoshyar Zebari, a Barzani ally and former foreign minister of Iraq, said the poll "supports the desire of the Kurdish people to decide their future" and that postponing it would be "political suicide".

Arbil is keen to use the referendum to exert pressure on Baghdad into making concessions on oil exports and disputed territories.

"Independence is an imperative, but that doesn't mean the state will be proclaimed" the day after the vote, Zebari said.

"It will have to be built while negotiations with Baghdad continue."

The planned referendum has angered the Kurds' international allies and the central government in Baghdad, which sees it as violating the constitution.

Last week, the federal parliament voted against the referendum in a bid to "protect the unity of Iraq", prompting a protest walk-out by Kurdish lawmakers.

- Effectively autonomous since 1991 -

And on Monday, Iraq's supreme court ordered a suspension of the referendum until it can examine complaints that the plebiscite is unconstitutional.

Abdel Hakim Khasro, a professor of political science at Arbil's Salahaddin University, believes there are no legal or constitutional obstacles to holding the ballot.

After all, supporters of the referendum argue, the oil-rich northern region has been effectively autonomous since the 1991 Gulf War, with its own institutions, budget and parliament.

But in Sulaimaniyah, which has a history of opposing Arbil's authority, many people are upset that the referendum is being held at all.

"This was decided by one party," said Shoresh Haji of the opposition Goran movement, referring to Barzani's Kurdistan Democratic Party (KDP).

"A state is not born from an announcement but must be built by putting in place a solid economic infrastructure."

Ismail Galali, a member of a movement that backs a "no" vote, agreed.

"Independence is the right of all peoples, but in my opinion what's happening now is a masquerade that will result in a backward emirate," he said.

Few residents of Arbil want to talk about the possible negative consequences of a "yes" vote, despite warnings from the KRG's powerful neighbour Turkey that the region would pay a price.

Turkish tanks staged military manoeuvres along the border on Monday.

"We are not trying to provoke anyone," 43-year-old Arbil newsagent Sirwan Ahmad told AFP.

"The fact that some Kurds are against holding the referendum is a sign that democracy exists in our region."

Most people in the regional capital openly support the referendum, despite the fact that their enclave is facing an unprecedented economic recession.

"That's no reason to give up on gaining our state," said Berwar Aziz, 23, who sells scarves in a shop near Arbil's UNESCO-listed citadel.

"I will vote 'yes' with all 10 fingers," he said, smiling.