Iraq accused Kurdish peshmerga fighters of seizing two key northern oil fields near the disputed city of Kirkuk Friday, as relations between Baghdad and the autonomous Kurdistan region hit a new low.

"The oil ministry strongly condemns the seizure and control of crude oil (wells) in the Kirkuk and Bey Hassan oil fields this morning by groups of Kurdish peshmerga forces," the ministry said in a statement.

Iraqi Kurdish leader Massud Barzani said Friday there was no going back on autonomous Kurdish rule in oil city Kirkuk and other towns now defended against Sunni militants by Kurdish fighters.

"Now, this (issue) ... is achieved," he said, referring to a constitutional article meant to address the Kurds' decades-old ambition to incorporate the territory in their autonomous region in the north over the objections of successive governments in Baghdad.

Militants who have overrun a swathe of territory north of Baghdad in a lightning offensive released on Thursday 48 foreigners, including four Turks, held for several days, Iraqi police said.

The construction workers, who were helping build a hospital in the now insurgent-held city of Tikrit, are from Turkey, Nepal, Bangladesh, Turkmenistan and Azerbaijan.

The rapid shift to Kurdish control in Iraq's ethnically mixed oil city of Kirkuk is a step toward a long-held dream for Kurds but has sparked fears among other groups.

Kurdish forces took control of Kirkuk and other disputed territory as Sunni Arab militants pressed an offensive that has seen them seize a large chunk of Iraq and sweep federal security forces aside.

A major offensive by jihadists is allowing Iraqi Kurds to take control of disputed territory that Baghdad has long opposed them adding to their autonomous northern region.

With federal forces abandoning their posts, Kurdish forces, known as peshmerga, are filling the vacuum in some areas -- defending them from the militants but also putting them under Kurdish control.

Kurdish forces took control of the disputed Iraqi oil hub of Kirkuk on Thursday to protect it from jihadists, after which a bomb targeted a Kurdish security minister, officials said.

Iraqi Kurds want to incorporate Kirkuk province into their autonomous region, a move Baghdad strongly opposes in a bitter, long-running dispute with them.

The jihadist Islamic State of Iraq and the Levant posted pictures online of militants bulldozing a berm dividing Iraq and Syria, symbolizing its goal of uniting its forces in the two countries.

The jihadists could be seen clearing a road through the berm, before trucks drove through as a militant stood nearby holding the group's black flag, in photos shared on websites and Twitter.

Security forces early Thursday ended an hours-long siege at a mall in the northern city of Kirkuk but not before militants killed nine people, security officials and medics said.

The attack Wednesday on the mall in the oil rich ethnic tinderbox city, which involved a car bomb and would-be suicide bombers, came amid a surge in unrest that has claimed more than 6,200 lives this year.

A suicide bomber detonated an oil tanker rigged with explosives at a police station north of Baghdad on Wednesday, killing five policemen, while attacks elsewhere left two dead, officials said.

Iraq is mired in its worst violence since 2008, with more than 5,500 people killed this year despite several major military operations targeting insurgents and tightened security measures.

The Muslim Eid al-Adha holiday began in Iraq Tuesday with a bomb ripping through a crowd of worshipers as they left a Sunni mosque, killing 12 people.

Three children, a policeman and an army officer were among the dead from the blast in the northern city of Kirkuk, which also wounded 26 people, police and a doctor said.