Syria’s civil war has produced an abundance of human tragedy. The latest estimate by the United Nations puts the death toll in the violence at a shocking 60,000. Portions of Aleppo and other major cities lie in ruins, and yet there seems to be no end to the fighting.

Among the most tragic victims are the innocent civilians who have been driven from or had to flee their homes, often with little more than the clothes on their backs. The Western press has taken note of their plight, but most of the focus to this point has been on refugees who have crossed the border into Turkey or Lebanon. There is another flow, however. It consists of Syrians who have fled into Iraq—primarily into Iraqi Kurdistan.

The largest Kurdistan Region refugee camp is Dumiz, near the border with Syria. When that facility was first established, KRG authorities allocated 110 acres. They assumed that even though there were approximately two million Kurds living in Syria, only about 1,500 Syrian Kurds were expected to seek shelter in Iraq.

That estimate proved to be far too optimistic. By early December 2011 there were at least 38,000 people in Dumiz, and more than 500 new refugees enter the now 270 acre camp each day. In Iraqi Kurdistan as a whole, the total of displaced persons is estimated to be more than 60,000. Not all of them are Kurds, but a sizable majority are, and how to handle the refugee issue has become yet another source of tension between the regional government in Erbil and Iraq’s national government in Baghdad.

Kurds on both sides of the border were troubled and suspicious when Iraqi Prime Minister Nouri al-Maliki temporarily closed the border crossings in mid-November. KRG leaders also scrutinized Baghdad’s moves to move more government troops north along Iraq’s border with Syria. They suspected that the redeployment had a dual purpose—not only to guard Iraqi territory from the spillover effects of the fighting in Syria but also to strengthen Baghdad’s military presence in the north and build the foundation for trying to intimidate the KRG. The Syrian refugee crisis is thus exacerbating an already dangerous confrontation inside Iraq.

The soaring numbers of refugees are also putting a financial strain on the KRG government and its taxpayers, especially in Duhok province. The cost of providing just basic food, shelter, and medical care for tens of thousands of people fleeing Syria into Iraqi Kurdistan has now exceeded $13 million USD. That amount may double as early as the spring of 2013.

There are also delicate political and diplomatic implications. The authorities in Baghdad worry about an influx of Syrian Kurds that could further enlarge the population of the Kurdistan region and make it even less receptive to the central government’s authority. Yet KRG leaders note that the primary, effective authority across the border in Syria’s Kurdish region is the YPG militia, affiliated with the Kurdish Democratic Union Party (PYD). The PYD has close ties with the radical leftist Kurdish Workers Party (PKK) in Turkey, and KRG leaders are understandably wary of stirring up further tensions with the regime in Ankara.

Washington is watching all of these developments with growing interest and uneasiness. It is revealing that the Obama administration has not suggested (much less actively supported) the establishment of an autonomous Kurdish regional government in northeastern Syria the way it did regarding northern Iraq’s Kurdish region during the final years of Saddam Hussein’s rule. U.S. leaders understand that both Ankara and Baghdad would deeply resent such a move, even though it might find some backing in Erbil. Washington is not anxious to antagonize either its Iraqi or Turkish ally over this issue. But events are evolving rapidly, and the growing Syrian Kurdish refugee crisis is creating multiple pressures on all parties involved. Washington could easily become embroiled in a multi-sided diplomatic crisis.