During his second unannounced visit to Iraq, where he met Iraq's Kurdish leader Massoud Barazani in the regional capital Irbil, Kerry said "this a very critical time for Iraq and the government formation challenge is the central challenge that we face."

His visit in Irbil comes after Kerry met Iraq's prime minister, Nouri al-Maliki, for closed-door talks in Baghdad on Monday.

Kerry reiterated Washington's demand to "produce the broad-based, inclusive government that all the Iraqis I have talked to are demanding." The US hopes that a power-sharing government will contain, if not end, sectarian strife in the country.

Barzani told Kerry that Kurds are seeking "a solution for the crisis that we have witnessed", but warned that it had created a "new reality and a new Iraq."

Iraqi Kurdish forces, known as peshmerga, have been the only forces that have managed to defend their territory against fighters of the Islamic State of Iraq and Syria (ISIS) group, a Sunni insurgency that has overtaken several key areas in Iraq's west and north.

Kerry acknowledged on Tuesday that they had been "really critical" in helping restrain ISIS.

Barzani has repeatedly blamed al-Maliki, who is a Shiite, for the current wave of violence in the country. Speaking to broadcaster CNN before Tuesday's talks, Barzani called for al-Maliki to step down.

Pressed on whether Iraqi Kurds would seek independence, Barzani said that "the time is here for the Kurdistan people to determine their future and the decision of the people is what we are going to uphold."

Kurds make up 20 percent of Iraq's population and are, therefore, crucial for any political solution. The Kurdish north is home to several vast oil fields that have led to relative prosperity and economic stability in the region.

UN: Over 1,000 killed

Meanwhile, the United Nations has said that at least 1,075 people were killed and 658 were injured in Iraq in the 17 days from June 5 to 22.

Rupert Colville, a spokesman for the UN's human rights office told reporters in Geneva that the numbers "should be viewed very much as a minimum."

Abductions continue to be reported in the northern provinces and in Baghdad, Colville said. They include 48 Turkish citizens kidnapped from Turkey's consulate when ISIS captured Mosul as well as 40 Indian nationals working for an Iraqi construction firm who were also kidnapped.

ng/lw (AP, Reuters, dpa)