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Artillery fire killed a civilian on Monday despite a ceasefire in a flashpoint northern Iraqi town that has been hit by deadly fighting between Kurdish and Turkmen forces, officials said.

Fighting broke out at the weekend in Tuz Khurmatu between the autonomous Kurdish region's peshmerga forces and Turkmen members of the Shia-led Popular Mobilisation Forces the second time in six months.

"Clashes were renewed sporadically in Tuz, but it was not like yesterday," said Mohammed Koja, the deputy governor of Salaheddin province where the town is located.

Koja said that mortar rounds and rocket fire had killed one person and wounded four.

A police colonel confirmed the toll but it was unclear which side killed the civilian.

The initial clashes between Turkmen and Kurdish forces began at around midnight Saturday and continued into Sunday.

Hadi al-Ameri, a senior commander in the Popular Mobilisation Forces announced at a press conference on Sunday afternoon that a ceasefire deal had been reached.

But a witness in the town said gunfire and periodic explosions could still be heard.

Prime Minister Haider al-Abadi ordered the Joint Operations Command to take "all necessary measures" to end the clashes, a statement from his office said.

Abadi urged the leaders of the forces involved to "focus efforts against the common terrorist enemy represented by the Daesh gangs", the statement said, using an Arabic acronym for the Islamic State group.

Both the peshmerga and the Turkmen fighters are battling IS, which overran large areas north and west of Baghdad in 2014.

But Kurdish forces and the PMF are vying for influence in some areas, a contest that has led to violence in Tuz Khurmatu.

The latest fighting came after unrest in Tuz Khurmatu last November that began as a dispute at a checkpoint escalated into clashes inside the town.

Dozens of homes were burned, and the town has been split between Kurdish and Turkmen areas, with neighbourhood minority residents moving back across the ethnic divide.

Baghdad turned to the PMF, which is dominated by Iran-backed Shia militias, to help stem the jihadists' 2014 advance and later push them back.

Kurdish forces also battled the jihadists in the north, but have largely fought independently of federal troops.

Agencies contributed to this report.