Iraqi forces clashed with Kurdish peshmerga fighters Friday and retook control of the last sector of the disputed province of Kirkuk, with a general killed in the fighting, security sources said.

"Police, counter-terrorism units and the Hashed-Shaabi (paramilitary forces) have retaken the Altun Kupri region," 50 kilometres (30 miles) from Arbil, capital of autonomous Iraqi Kurdistan, the Joint Operations Command (JOC), which groups Iraqi forces, said in a statement.

The security source, who asked for anonymity, said: "There were clashes but they managed to launch the assault... and hoist the flag on the municipality building."

A Kurdish general, Ghazi Dolemri, was killed in the fighting, a source close to the fighting said, while a senior peshmerga official in southern Arbil said Kurdish fighters were confronting Hashed units advancing on Sirawa, five kilometres (three miles) north of Altun Kupri.

Journalists at the scene said the peshmerga were firing mortars and the two sides exchanging automatic weapons fire.

The peshmerga planted explosives that damaged one of the main bridges linking Kirkuk to their regional capital Arbil over the Little Zab river, according to a local security source.

In Baghdad, Haydar Hamada, a spokesman for Prime Minister Haider al-Abadi, said Iraqi forces would keep up operations to restore the authority of the state.

The agricultural region of Altun Kupri, which means "golden bridge" in Turkish, is inhabited by Kurds and also has a Turkmen community, and it covers an area of 520 square kilometres (200 square miles).

Since Sunday, federal forces backed by allied paramilitary units have driven Kurdish peshmerga fighters out of Kirkuk as well as disputed areas of Niniveh and Diyala provinces.

The advance has been mostly without resistance, with the peshmerga pulling out under an agreement between some Kurdish leaders and Baghdad.

Abadi ordered the operation to establish central authority three weeks after the Kurds held an independence referendum in their three-province autonomous region as well as the disputed areas in defiance of Baghdad.