BAGHDAD — Despite intense U.S. pressure, Iraqi legislators Sunday failed to reach an agreement to solve an increasingly bitter dispute over the oil-rich northern city of Kirkuk.

Kirkuk sits on Iraq's northern oil fields and also on a fault line between the Sunni Muslim Kurds who dominate most of northern Iraq and the Sunni Arabs who occupy the center of the country. Saddam Hussein forced thousands of Kurds out of the city to make way for more Arabs, but since the 2003 U.S.-led invasion of Iraq, the Kurds and their militia, the peshmerga, have driven many Sunni Arabs out of Kirkuk.

Kurds in Kirkuk responded to the rejection of the election law, which called for the Kirkuk provincial council to be divided equally among Turkomen, Arabs and Kurds, with two seats for Assyrian Christians, by mounting a large demonstration that turned bloody following bombings that killed at least 25 people.

In Kirkuk, anger is rising.