Iraq's northern cities havens of stability - for now

By David Clarke

DAHUK, Iraq (Reuters) - "Welcome to Dream City" says the sign at a funfair in Dahuk, a city in Iraqi Kurdistan.

It's past 10 p.m. and parents stroll arm-in-arm in the cool evening air in this northern Iraqi city cradled by two steep mountain ridges, 60 km (40 miles) from the Turkish border.

Their children dash from the dodgems to an amusement arcade. A towering Ferris wheel rotates overhead, lights flashing, the smell of popcorn wafting.

For people to the south in Iraq's capital Baghdad -- where people scurry home in the late afternoon to endure nights of crackling gunfire, thudding mortars, wailing sirens and the thunder of helicopters overhead -- such a scene is but a dream.

But as Turkey gears up for a potential attack on separatist PKK rebels hiding in Iraqi Kurdistan's mountains, fear is rising here that this region's stability too may crumble.

Turkish artillery shelled the craggy peaks a two hour drive northwest of Dahuk on Monday, ratcheting up tension. Washington fears a Turkish incursion could sow chaos in the region and harm its uphill battle to bring stability to the rest of Iraq.

"They should be firing at the PKK but they are targeting civilian villages and we are worried about this," said Eesmet Huseen, 47, who runs a restaurant in Dahuk. "The problem is with the PKK and Turkish soldiers, not with the Iraqi people."

As night falls in Dahuk, bakeries do brisk business, whipping fresh bread out of kiln ovens. Old men play cards and dominoes, sipping tea in sidewalk cafes.

Midnight nears, and a vast supermarket in a shopping mall is still open. Girls in jeans and T-shirts saunter out.

"You feel alive when you come here. You can do anything you want. Husbands, wives can go to the shops with their children, or sit in a coffee shop," said a Baghdad resident visiting Kurdistan.

"You can stay out late and just jump in a taxi without fear of being followed. You can't do that in Baghdad."

DIFFERENT TO IRAQ

Brutally suppressed by former Iraqi President Saddam Hussein, Iraq's largely autonomous Kurdistan region is enjoying an economic revival four years after the U.S.-led invasion of Iraq. Residents don't want to lose their safe-haven status.

"In Kurdistan, we are different to Iraq," said Huseen. "We haven't let the terrorists come here."

Large swathes of the country are plagued by suicide attacks, car bombs, kidnappings and sectarian killings, variously blamed on Sunni Arab Islamist militants linked to al Qaeda and Shi'ite militias with backing from groups in Iran.