Police shot dead three Turkmen on Saturday in the town of Tuz Khurmatu, south of the provincial capital Kirkuk, according to Governor Abdul Rahman Mustafa.
The Turkmen were killed after they opened fire on a police building during a demonstration, he said.
"Elements seeking to destabilise Kirkuk ... exploited the peaceful demonstration and opened fire on the police building without any justification, prompting the police to return fire," Mustafa told AFP.
The incident followed the killing by US soldiers of two Turkmen on Friday during an earlier demonstration in Tuz Khurmatu, a US military spokesman said. He told AFP a US patrol had come under fire and had responded, killing two Turkmen and wounding two others.
In a separate outbreak of ethnic clashes on Friday, five Turkmen were killed in Tuz Khurmatu, said the local district administrator, Rashid Muhammad. Unknown arsonists also set fire to some shops in the area, he told an Aljazeera correspondent.
Another three Turkmen were killed when fighting resumed in the market area and near the district administration building, the correspondent added.
In a separate development, unidentified assailants set fire to the oil pipeline linking the Beiji refinery to Kirkuk oilfields, an Aljazeera correspondent said on Saturday.
The pipeline has been attacked repeatedly in recent weeks by Iraqi resistance groups.
Tensions have risen in Tuz Khurmatu as the Kurds have demanded that the town be transferred to the Kurdish-majority governorate of Kirkuk, from the Arab-majority province of Salahuddin, in which it currently lies.
A Turkmen representative in the Kurdish city of Arbil, Jawdat Al-Najar, told AFP the clashes in Tuz Khurmatu were provoked by "those who don't want stability in Iraq."
Turkish tanks near Iraq border:
Ankara is mulling sending troops
There are about five to six million Kurds in Iraq, around four million of whom live in the Kurd-dominated north of the country.
A Turkic ethnic group, Iraq’s Turkmen originally came from central Asia in a gradual migration lasting several hundred years beginning in the seventh century.
Today, around two million Turkmen are believed to live in Iraq.
The Kurds in the north have enjoyed significant autonomy from the Arab-dominated government in Baghdad in recent years, largely thanks to US protection.
But after President Saddam Hussein’s removal in May, they have been under intense US and Turkish pressure to downplay their separatist aims.
Turkey, keen to prevent an independent Kurdish state emerging in oil-rich northern Iraq that might encourage separatist Kurds in Turkey itself, has publicly backed Turkmen political rights as a way of diluting Kurdish dominance in the region.
In a reminder of continuing conflict between Turks and separatist Kurds, three Kurdish guerrillas and two Turkish soldiers were killed during a fierce gun battle in Turkey's troubled southeast on Friday, according to Turkish military sources.