The clashes erupted near the Makhmur camp for Kurdish refugees from Turkey, where the Iraqi army wanted to step up security to control entrances and exits.
Turkey considers the camp to be a stronghold for fighters from the rebel Kurdistan Workers Party (PKK), which has waged a decades-long insurgency against Turkey and is considered a terrorist group by Ankara and its Western allies.
On Sunday, fighting broke out between soldiers from the Iraqi federal government and peshmerga fighters of northern Iraq's autonomous Kurdistan region.
Several locations are disputed between the security forces of the federal and Kurdish governments, including Makhmur camp and its surrounding security posts.
The Kurdish fighters "refused" to hand over control over the posts to the Iraqi army, resulting in the clashes in which an "Iraqi soldier was killed", an Iraqi military source said.
A Kurdish officer meanwhile said one of their forces was also killed and five others were injured.
The officer, who requested anonymity, said Kurdish forces had asked PKK fighters to hand over control to them but that they had instead handed the posts over to the Iraqi army.
Turkey regularly strikes the Makhmur camp and the surrounding area, as part of its years-long military campaign against PKK members in northern Iraq.
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