The leader of Iraq’s regional Kurdish government stepped down on Wednesday amid the fallout from an independence referendum that was widely condemned by neighbouring countries.

Masoud Barzani’s resignation, ending 12 years as president of the Kurdistan Regional Government (KRG), came after September’s vote caused an international shutdown and an armed confrontation with forces sent by the central Iraqi government.

Israel was the only country to support the referendum, in which millions of Kurds in the KRG region and other disputed Iraqi territories supported breaking away from Baghdad.

The Kurds’ decades-long bid for independence suffered severe setbacks after Kurdish-held territories were lost in a surprise offensive by Iraqi troops backed by paramilitaries, including pro-Iran Shia militias.

Clashes with Kurdish Peshmerga fighters erupted on the outskirts of Kirkuk – a disputed oil-rich city – when the Iraqi military took control.

The loss of Kirkuk dealt a devastating blow to Mr Barzani, 71, as control over its oil wealth played a key role in Kurdish plans for independence.

The referendum also met strong opposition from the KRG’s neighbours Turkey and Iran, and its ally the United States.

Turkey closed its airspace with the KRG in response while Iran closed a number of border crossings. The two countries also held joint military exercises with Iraqi troops amid concerns that the vote could encourage separatism among their own Kurdish minorities.

There was criticism of Israeli support for the vote, with Iran’s Ayatollah Ali Khamenei last month accusing the US of trying to benefit by using the vote “to create a new Israel in the region.”

Israel’s Prime Minister Benjamin Netanyahu had said his country “supports the legitimate efforts of the Kurdish people to achieve their own state.”

But there were signs of normalisation as the Bashmagh border crossing reopened and Iran’s Chief of Staff Mohammad Baqeri said others would follow.

The KRG’s autonomy now faces further restrictions as talks between the Iraqi military and Peshmerga began last Friday over control of the region’s international borders. Iraqi Prime Minister Haider al-Abadi said the discussions are aimed at deploying Baghdad’s troops to crossings with Turkey, Syria and Iran, including one which hosts a pipeline exporting oil into Turkish territory.

Despite the resignation, Mr Barzani will remain involved in Iraqi Kurdish politics as leader of the High Political Council, a body formed to coordinate the post-referendum period.

“I, as Masoud Barzani the Peshmerga, will continue with our nation and beloved Peshmerga in endeavours to achieve the just rights of our nation and protect the achievements of our nation,” he said in his resignation letter to parliament.