KIRKUK, Iraq — The night sky flickers a dull orange in this northern Iraq city as flares burn above the region’s abundant oil fields.

The electricity, too, flickers and market vendors sell blocks of ice as backup refrigeration.

While more than 10 percent of Iraq’s oil flows from Kirkuk and its environs, sewage flows in many of the city’s streets.

Violence has dipped so dramatically that American civilian government workers walk through certain Kirkuk markets without body armor, but locals still fret about the possibility of civil war in this poverty-stricken city of contrasts.

The city and the rest of Kirkuk province is a microcosm of Iraq, with Kurds, Arabs, Turkmen, and other groups wrestling for power.

Iraqis and Americans working in the area see it as a barometer for the rest of the country and say chances for reconciliation between the groups are shaky.

"What we’ve asked of these people is incredibly difficult," said Howard Keegan, who has led American efforts to build Kirkuk’s civil society and government for the past 18 months.

"In five years, we’ve asked them to go from a dictatorship to a full-fledged democracy."

Divisions in Kirkuk are less a fault line than a series of fractures going wildly in all directions.

The majority-Kurdish province teeters between joining Iraq’s semi-autonomous Kurdish region or staying under the control of the central government.

A contentious referendum on the issue has been indefinitely postponed.

Ethnically based political parties disagree on power-sharing and what part of Iraq should control the province.

Kurds, Arabs, and Turkmen are suspicious of each other, and just as suspicious of their own political parties.

Even the two main Kurdish political parties are bitter rivals and many Kurds are sick of both of them.

Most Americans and Iraqis interviewed agree that American reconstruction efforts have improved stability in the province.

But they worry that looming troop withdrawals could imperil the fragile progress.

"There’s so many forces at work in this (province)," said Sgt. Joshua Erickson, an Army reservist who has been tracking the province’s progress in civil society and governance for a provincial reconstruction team since February.

"Either they’ll figure out how to reconcile their differences, which in and of itself will be a small miracle, or they will be like a lot of other countries in the Middle East and keep squabbling with each other."

Kurds, Arabs and Turkmen, many with long memories and a laundry list of historical abuses committed against them, are working on a preliminary framework for provincial elections.

Kirkuk alone was left out of a sweeping election law passed by the Iraqi parliament in late September.

Instead, a multiethnic committee is slated to make recommendations by March 31.

"Kirkuk is part of the problem of Iraq and now we have to make it part of the solution," said Mohammed Khalil, an Arab member of the Kirkuk Provincial Council, who promptly followed up that statement by blaming Kurds for political instability.

Lacking basic services

In the streets of Kirkuk, different ethnicities mingle at markets and often live in mixed neighborhoods.

Women in black, head-to-toe abayas walk next to teenagers with flashy Western shirts and heavily moussed hair.

But tensions persist and many worry that if reconciliation fails, civil war may follow.

Solid numbers are hard to come by, but members of the reconstruction team estimate that unemployment is between 35 and 45 percent in the province, much higher as you get away from the city of Kirkuk.

Basics like health care, sanitation and education are often lacking.

Many blame the provincial government for failing to take care of their constituents.

"The authorities are not trying to create a good community, they are trying to get money into their hands," a local shop owner said.

A drop in violence and implementation of a micro-loan program nurtured by American forces have improved commerce in the city, Erickson said.

"They’re not going to invest their money in something for their livelihood if they think it’s not going to last, or get blown up," he said.

While violence has ebbed over the past year, its specter is ever present.

The provincial government building is heavily fortified and guarded by scores of Kalashnikov-carrying Iraqi police, often augmented by American soldiers protecting the Kirkuk Provincial Reconstruction Team.

The director general of health, who has worked closely with the Americans, survived a car bombing last month and a man ran at a U.S. military convoy with an armor-piercing grenade last week before thinking better of it and fleeing.

Jamal Saleh, a Kurdish-American who grew up in northern Iraq and now works as an interpreter for U.S. forces, said Kirkuk could have a bright future, but not unless the current climate greatly improves.

"It’s a big challenge. God help us," he said.