THE 4 million Kurds in northern Iraq, hard hit by an Iraqi-imposed economic blockade and fearful of the forces massed to the south, are preparing for a winter of deprivation and violence.Kurdish cities are cut off from food and fuel supplies, and prices doubled as the month-long blockade took hold. Cars and trucks, in long columns that wind down the street, wait for two or three days outside gas stations, hoping to find enough fuel to fill small plastic containers. Shoppers pick through the few potatoes and eggs in the market and hoard what they can. But the most dangerous confrontation with Baghdad runs through a string of villages along the Zab River. Here, Iraqi forces lob shells on fields and houses. Hundreds of Kurds have fled during the past two weeks. Kurdish fighters are being pushed back, and the Iraqis, who had abandoned much of the north, are slowly regaining ground. "The Iraqis are approaching the main cities and strategic places to try and encircle them," says Jalal Talabani, the leader of the Patriotic Union of Kurdistan (PUK), one of the two main Kurdish guerrilla groups. "They want to prevent people from escaping to the countryside and to the Iranian and Turkish borders." Kurds have lived under the protection of a security zone set up by the Western allies north of the 36th parallel since last April. Iraqi forces voluntarily withdrew from checkpoints that they shared with peshmerga guerrillas in Sulaymaniyah - which is outside the security zone - and Erbil last month after some of the heaviest clashes since the abortive uprising last March. But Kurdish leaders contend that these two cities, each with some 1 million residents, are the objectives of the current campaign. The withdrawal of Iraqi forces from the two cities coincided with the imposition of an economic blockade by Baghdad. On Nov. 12 Iraq agreed to lift the one-month-old embargo, if Kurdish forces would withdraw from the cities. But as soon as Kurdish fighters complied, Iraqi troops advanced and tightened the stranglehold on goods moving north. Kurdish guerrillas have formed thin defensive lines below Erbil and Sulaymaniyah, but face an estimated 17,000 Iraqi soldiers with heavy artillery and tanks. Turbaned peshmerga, armed with AK-47 assault rifles, machine guns, and rocket-propelled grenades, peered through binoculars at the Iraqi troops positioned on sandy ridges on the other side of the Zab River. "Every day they move a quarter of a mile closer," says a bearded peshmerga, who stands next to a defective mortar round fired by the Iraqis. "Last week we were on the other side of the bridge." Kurdish leaders say that Iraqi forces are held back from a full-scale onslaught, like the one they made against the aborted uprising last spring, by the agreement to keep the United Nations team in the country. The United Nations agreement, due to expire Dec. 31, has been renewed for six months. And most expect the monitoring team to also stay on. "If these forces leave and this agreement is not renewed, then Iraq will have a free hand to attack the Kurdish people," says Mr. Talabani. Kurdish leaders say Saddam Hussein is using military force and the economic blockade to pressure the eight guerrilla groups that make up the Kurdistan Front into accepting Baghdad's terms for an autonomy agreement. Massoud Barzani, who heads the Kurdistan Democratic Party, sees a political solution with Baghdad as the only safeguard against another mass exodus to the mountains. "Our problem needs to be seen in political terms, not just humanitarian terms," he says. But talks with the Iraqi government are deadlocked over issues such as the size of the proposed autonomous region. And Kurdish leaders, such as Talabani, say that Baghdad has failed to live up to past agreements and cannot be trusted to abide by any new ones. "The Iraqi government never follows through on any agreement. They sign the piece of paper and they say they will carry it out, but we will never trust them," says Jamal Aziz Amen, a PUK leader in Sulaymaniya. "Another exodus of the Kurds must be expected if the international community does not act in time," says Talabani.