Heavy fighting raged in the northeastern town of Kifri Monday after a series of weekend clashes between Kurdish guerrillas and Iraqi troops, witnesses said.

They also reported fighting in Kalar, near Kifri. Both towns are close to the Iranian border.At least two Iraqi Kurds were killed during weekend clashes with Iraqi troops in Kifri, about 140 miles northeast of Baghdad.

About 1,000 Kurds fled Kifri, 93 miles south of Sulaimaniya, to the Sayed Sadiq refugee camp. They said heavy fighting continued Monday.

Forty Kurds, 35 of them peshmergas (Kurdish guerrillas), were admitted to Sulaimaniya hospital after Iraqi tanks attacked Kifri Saturday.

Unconfirmed reports detailed larger numbers of dead and wounded.

Kurds streaming into Sayed Sadiq refugee camp, about 30 miles east of Sulaimaniya, said Iraqi tanks suddenly started bombarding Kifri Saturday.

It was not clear if the tanks had entered the town, in an area of Iraq controlled by the Kurds.

They said the peshmergas were unarmed when the shelling began.

A spokesman for the Kurdish Democratic Party in London said Saturday the shelling had caused heavy civilian casualties.

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Fighting spread to Kalar Sunday when the town also came under fire from Iraqi tanks, refugees said. Helicopters were also reported to have bombed and strafed both towns.

There were no reports of Iraqi casualties but refugees said they saw some Iraqi tanks burning.

Roads north from the area were reported packed with Kurds fleeing the fighting.

Sayed Sadiq camp is already jammed with Kurdish refugees. They fled President Saddam Hussein's troops who crushed a month-long post-gulf war rebellion at the end of March.

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