ARBIL, Iraq, Aug 9 (Reuters) - With Islamist militants just 30 minutes drive away, foreign oil workers were flying out of Iraq's Kurdish capital by the hundreds and business was booming in the city's arms market.
Spared a decade of sectarian conflict in the rest of Iraq, Kurds in Arbil were stocking up on weapons on Friday and keeping a wary eye on their Arab neighbors as they faced what a senior official called "an existential threat" from the Islamic State.
"People in Arbil are quitting their jobs and coming to buy weapons so they can go to fight," said Alan, a 35-year-old gun merchant, who worked in a pizza shop during 12 years in the United Kingdom.
He sold 45 guns on Thursday alone, fetching $1,300 for an assault rifle that used to cost $700.
"Of course people are scared. Is Arbil threatened? Yes, it is in danger."
The Sunni militants - rejected by al Qaeda as too extreme - have seized tanks, machinegunes and other heavy weapons from Iraqi soldiers who fled their advance through the north by the thousands in June, giving them unprecendented momentum.
The march on Arbil they began on Thursday is the biggest security threat to the city since former Iraqi dictator Saddam Hussein's troops menaced the region. The group is notorious for beheading or shooting anyone who defies them.
"It's not usually like this. People are buying to defend their land and their honor," said 40-year-old arms merchant Sherwan Mohammed Darbandi. "We won't let them come here. They don't have the ability to reach Arbil."
On Thursday, the Sunni militants put their black flag over a checkpoint in the border area near with the semi-autonomous Kurdish region, marking a dramatic push that gave them a fifth oilfield, more towns and control over Iraq's biggest dam.
The start of U.S. airstrikes on Islamic State positions on Friday eased nerves but demand for weapons is climbing nonetheless, driving up prices of AK-47 assault rifles even though they cannot do much against the Islamic State's arsenal.
FOREIGN OIL COMPANIES
It was not meant to be this way in Kurdistan, which attracted foreign oil companies who felt safe working here. Hundreds of their employees departed from Arbil's airport on Friday, taking no chances.
"The company told us to leave because it's not safe for us anymore," said a worker at an oil services company who asked to remain unnamed and was evacuated from a rig site on Thursday. He did not expect to return to work again soon: "We're on standby until further notice".
The Kurdish peshmerga, which translates as "those who confront death", have always been regarded as brave men, who battled with Saddam Hussein's troops.
Islamic State fighters routed them, and forced tens of thousands of members of the Yazidi ethnic minority and Christians to flee for their lives.
A senior Kurdish official said US airstrikes on Friday had destroyed a convoy of 10 Islamic State armored vehicles that were on their way to Arbil, but said the city was safe for now.
"The Islamic State is mobilizing all its forces in Iraq and Syria to come and fight the peshmerga. The fight is very serious. It is existential," Hoshiyar Zebari told a news conference.
Some families in Arbil fled the city for safety, and those who stayed bought extra supplies of fuel and food. On Thursday night, young men danced on a busy commercial street to show support for the security forces and that they were not afraid.
Kurds like 22-year-old student Kawan Mahmoud are taking matters into their own hands. He was one of the shoppers at the arms bazaar.
"I came to buy weapons so I can go to war," said Mahmoud. "I am not a peshmerga but I am going to volunteer myself."
Some Kurds have become deeply suspicious of their Arab neighbors overnight. The region has given refuge to tens of thousands of Arabs displaced by violence in the rest of the country since the start of the year.
"We opened the doors to the Arabs but yesterday we discovered that in some houses they have weapons," said Ziad Taha Aziz, 44, who sells shoe polish and brushes at a stall in the market.
"Some of them are good, and some of them are bad. We need to arrest them all and see whether there are traitors among them. We think there are sleeper cells." (Writing by Michael Georgy; editing by Philippa Fletcher)
BEFORE YOU GO
08/16/2014 6:17 PM EDT
US Military: Fighters, Drone Aircraft Strike Militants In N Iraq
BREAKING: US military: Fighters, drone aircraft strike militants near Irbil and Mosul Dam in Iraq— The Associated Press (@AP) August 16, 2014
08/16/2014 6:07 PM EDT
Kurdish Officials Say 300 Killed In Friday 'Massacre'
Correspondent for Britain's The Sunday Times Hala Jaber reports that Kurdish and Yazidi officials say the death toll from the Islamic State's attack on the Iraq village of Kocho on Friday is higher than previously estimated. A Kurdish official initially said around 80 people lost their lives.
.4/ 1000 women were taken as prisoners by #IS split into 2 groups. The "pretty incl gilrs aged btwn 10-11 and the others.— Hala Jaber (@HalaJaber) August 16, 2014
08/16/2014 5:57 PM EDT
British PM: Islamic State Militants Could Target UK
Islamic State militants in Iraq could grow strong enough to target the UK unless action is taken - PM David Cameron http://t.co/k2i5CjTm2S— BBC Breaking News (@BBCBreaking) August 16, 2014
08/16/2014 4:49 PM EDT
NYT Correspondent Recounts Iraq Helicopter Crash
New York Times correspondent Alissa J. Rubin tells her story inside the Iraqi helicopter that crashed on the Sinjar mountains on Tuesday while attempting to rescue stranded Yazidis.
Rubin was wounded in the crash and dictated the article from her hospital bed in Istanbul, the newspaper notes.
Read her moving account on The New York Times here.
08/16/2014 2:23 PM EDT
Iraq Refugees Learn Of Yazidi Massacre
The BBC's Yalda Hakim reports from a refugee camp in Dohuk on how the Yazidi community learned of an alleged massacre by Islamic State militants in Iraq.
Watch the BBC report here.
08/16/2014 1:03 PM EDT
U.S. Provides Air Support To Kurdish Offensive
Kurdish forces, supported by U.S. warplanes, are battling to recaptured Iraq's largest dam from Islamic State militants, Agence France Presse reports.
More from AFP:
Kurdish forces attacked the Islamic State fighters who wrested the Mosul dam from them a week earlier, a general told AFP.
"Kurdish peshmerga, with US air support, have seized control of the eastern side of the dam" complex, Major General Abdelrahman Korini told AFP, saying several jihadists had been killed.
08/16/2014 12:54 PM EDT
The Kurdish Iraqi leader has appealed to Germany for weapons to battle the advancing Islamic State, Reuters reports.
Germany has shied away from direct involvement in military conflicts for much of the post-war era and a survey conducted for Bild am Sonntag newspaper indicated that almost three quarters of Germans were against shipping weapons to the Kurds.
But Germany's defense minister has said the government was looking into the possibility of delivering military hardware.
Masoud Barzani, the president of Iraqi Kurdistan, said the Kurds needed more than the humanitarian aid that Germany began sending on Friday to support people forced to flee their homes by the Sunni militant group's advance.
"We also expect Germany to deliver weapons and ammunition to our army so that we can fight back against the IS terrorists," Barzani told German magazine Focus. He said they needed German training and what they lacked most were anti-tank weapons.
08/16/2014 11:38 AM EDT
U.S.-Backed Kurds Attempt To Recapture Mosul Dam
#BREAKING: US-backed Kurds in bid to retake Iraq's largest dam: general— Agence France-Presse (@AFP) August 16, 2014
08/16/2014 11:14 AM EDT
Airstrikes Target Islamic State After Reports Of Yazidi Massacre
Airstrikes pounded the area around Iraq's largest dam on Saturday in an effort to drive out militants who captured it earlier this month, as reports emerged of the massacre of some 80 members of the Yazidi religious minority by Islamic extremists.
Residents living near the Mosul Dam told The Associated Press that the area was being targeted by airstrikes, but it was not immediately clear whether the attacks were being carried out by Iraq's air force or the U.S., which last week launched an air campaign aimed at halting the advance of the Islamic State group across the country's north.
The extremist group seized the dam on the Tigris River on Aug. 7. Residents near the dam say the airstrikes killed militants, but that could not immediately be confirmed. The residents spoke on condition of anonymity out of fears for their safety.
08/15/2014 6:31 PM EDT
U.S. May Speed Up Aid To Iraq Despite Billions Already Spent
The United States may accelerate economic and military aid to Iraq now Prime Minister Nouri al-Maliki has stood down, Reuters reports.
U.S. officials first want assurances that the Iraqi government has moved away from the sectarian policies of al-Maliki's administration, according to the news agency.
Read the full story here.