WASHINGTON (Reuters) - The United States sought on Monday to avoid openly taking sides in an Iraqi-Kurdish dispute, as Iraq’s capture of the Kurdish-held city of Kirkuk raised the risk of an open conflict between U.S. allies in the fight against Islamic State. U.S. President Donald Trump expressed disappointment the two sides were fighting. “We don’t like the fact that they’re clashing. We’re not taking sides,” Trump told reporters at the White House.  “We’ve had for many years a very good relationship with the Kurds as you know and we’ve also been on the side of Iraq, even though we should have never been there in the first place. We should never have been there. But we’re not taking sides in that battle.” Iraqi government forces captured the major Kurdish-held oil city of Kirkuk on Monday, responding to a Kurdish referendum on independence with a bold lightning strike that transforms the balance of power in the country. A convoy of armored vehicles from Iraq’s elite U.S.-trained Counter-Terrorism Force seized Kirkuk’s provincial government headquarters on Monday afternoon, less than a day after the operation began, a Reuters reporter in Kirkuk said. Senator John McCain, the influential chairman of the Senate Armed Services Committee, warned Iraq’s government of “severe consequences” over any further misuse of U.S.-provided weaponry against Kurdish forces. Pentagon spokesman Colonel Robert Manning declined to speculate on whether the United States might cut off military aid and training to Iraqi forces in the event a major conflict, saying: “I’m not going to speculate on that but I will tell you that we’re looking at all options for planning considerations ... We encourage dialogue.” 