KIRKUK, Iraq — Howard Keegan sweeps into a dusty street market in the late afternoon heat and is immediately mobbed by shoppers, storeowners and local press eager to talk about their daily struggles in this oil-rich, ethnically diverse northern city.

It’s a security nightmare for his detail of soldiers, but Keegan, walking without body armor to make locals more comfortable, stays and listens as the crowd swells.

"I’m 40 years old and myself, I feel a stranger in this country. This used to be a close-knit country," said Yousif Nasih, a Kurdish fabric shop owner bemoaning friction between different ethnic groups.

A gruff former Marine with wild eyebrows and a steely stare, Keegan leads the Kirkuk Provincial Reconstruction Team that is working to quell tensions between Kurds, Arabs, Turkmen and other groups and bring disparate political parties to a long-sought agreement on local elections.

Many think a solution to Kirkuk’s political problems is a key to greater stability in Iraq, but the future of Keegan’s mission is as unsettled as that of the divided province. The team has been told that next month, as part of a larger troop reduction in Iraq, its military contingent will be drastically reduced, scheduled to go from roughly 30 soldiers to fewer than 10. It’s a cut many team members fear will hamper the mission and threaten fragile social and political gains at a critical time in the province.

The team is made up of 34 civilians, many from the State Department, and around 30 reserve soldiers from the Missouri-based 418th Civil Affairs Battalion who provide security and expertise. The team’s near-daily visit to its headquarters in the provincial government building downtown requires more than a dozen soldiers for security. Going downtown, walking the streets and talking to people is key to reconciliation, Keegan said.

"If we don’t continually get out (in town) it’s hard for us to know what the people are after," he said. "[The cuts] couldn’t come at a worse time."

Many other team members echo that view, worrying that the cuts could lead to a reversal after months of progress.

In the past eight months, commerce has picked up, and Kirkuk residents have made strides in standing up civil society and local government, said Lt. Col. David Menegen, the PRT’s deputy team leader and ranking military officer. Menegen, a New York City reservist with the 353rd Civil Affairs Battalion, said the job of the PRT should eventually be put entirely in Iraqi hands, but that now is too soon for such a big cut.

"I’m supportive of downsizing the PRT at some point, but it’s the time frame," he said. "It’s a process, not an event."

Aside from governance, team members also work to improve local infrastructure, healthcare, media, agriculture, local police and courts — all projects that will need to be trimmed with the cutbacks, said Jeffrey Ashley, the team’s U.S. Agency for International Development representative.

"We are working in close cooperation with [Multi National Corps-Iraq and Multi-National Force-Iraq] to ensure that all PRTs have the support they need to operate," a statement from U.S. Embassy officials with the Office of Provincial Affairs read. "We are reconfiguring our resources to be in a position to continue to provide the type of support we are committed to giving the Iraqi government during this transition period."

A key place

Because of its unsettled ethnic tensions, Kirkuk was left out of a sweeping election law passed late last month by the Iraqi Parliament that paved the way for local elections in the rest of the country. The province, however, will form a multi-ethnic committee tasked with coming up with election recommendations by March 31. Also put on the backburner is a proposed referendum to decide whether Kirkuk becomes part of semi-autonomous Iraqi Kurdistan or remains under the control of the central government.

The Kirkuk PRT is deeply enmeshed in the negotiations to form the advisory committee, working with all the ethnic groups to come to political agreement.

With its vast oil reserves, Kirkuk has outsized importance in the country. In a recent New York Times interview, Democratic presidential candidate Barack Obama mentioned the province’s unsettled political situation in assessing progress in Iraq. As Kirkuk goes, many think, so goes Iraq.

Most days, Keegan and his governance ride in a heavily defended military convoy to the dilapidated, heavily guarded provincial government building in downtown Kirkuk. They meet with members of the provincial government, who hold the key to the region’s future.

"We have faced difficulties in Kirkuk," said Tahseen Kahea, a Turkmen Provincial Council member. "We as Turkmen need justice, we need rights for our people, we need democracy for our people, we need freedom for our people."

The ethnic groups have long memories. Some invoke abuses dating back to the Ottoman Empire in laying out their claims to power.

"It’s like getting the most complicated stereo system on Earth and the instructions are in Japanese," Keegan said.

‘Before, it was easy’

Both Iraqis and team members say efforts by the PRT have helped the province make strides in easing ethnic tensions and coming to a political agreement but stark challenges still remain.

Kurds, Arabs, and Turkmen remain distrustful of each other. Even the dominant Kurds squabble between two political parties — the Patriotic Union of Kurdistan and Kurdistan Democratic Party — and some Kurdish residents are fed up with both factions.

The American presence is the only thing keeping the fragile peace between Kirkuk’s ethnic groups, said Araz Ahmed, a Kirkuk resident working as a translator for the reconstruction team.

"Disaster, civil war," he said when asked what the consequences would be if the Americans pulled out.

In a bare-walled office in the government building, Sheik Hussein Aly Saleh, an Arab provincial council member, tells PRT governance representative Kris Graf that he is working for all the people of Kirkuk but that Arabs have been shut out by the majority Kurds.

"American officials and military leaders are cooperating with the Kurds," he said.

The fact that Saleh was talking at all is an improvement. Since Keegan arrived 18 months ago, Arab and Turkmen political parties ended long boycotts of the provincial government.

Keegan said there was much more animosity between ethnic groups and toward U.S. forces when he arrived in Kirkuk.

"There’s a growing feeling in the community for everyone to work … together," he said.

Away from the halls of power, lies a sprawling, crumbling city, where sewage seeps into the streets and many are impoverished. The people here seem most interested in basics, like education and security. One 14-year-old boy riding his bike through the market Keegan visited said he recently dropped out of school and went to work full time because his father was killed.

A teacher who wished to remain anonymous because of security concerns, said Kirkuk is plagued by substandard schools.

"The education in this city is insufficient," she said. "The politicians should sit with the people and educate them."

Shop owner Ako Hassan, who is Kurdish, is pessimistic about reconciliation in the province.

"The Kurds are willing to live with other ethnicities but the Turks and Arabs are against us," he said.

In a way, getting along was easier under Saddam Hussein’s dictatorship, said Tahseen Kahea, the Turkmen provincial representative.

"Before, it was easy; there was a regime and we were the opposition. Now it is very different for us."