We were acting up in Kishmisha, the juice bar at the end of our street, taking bright red lights out of each other's ears and pockets, making hankies disappear, Peat apparently taking 30 or so ping pong balls out of his mouth and so on, as we seem to do most days. People expect it of us. It would be rude to disappoint them.

A man we didn't know came in. "Are you some kind of magicians?"

That's how we met Shakhawan, a journalist from a Kurdish newspaper, Al-Ta'akhi. He and the others live in the offices in Baghdad from Saturday to Wednesday, returning to Erbil and their families in between. The common room walls have pictures of Salah Yousifi, the former editor in chief, killed by Saddam in the 1970s, and another journalist from the paper who disappeared.

Shakawan was arrested, questioned and released under instructions to give information about fellow journalists and students in his university. He fled and the newspaper retreated from Baghdad.

Ashura being a time of grief for the Imam Hussein, circuses are not allowed in Shia areas, which include more or less the entire south of Iraq and all the schools we've arranged to do shows in. For the few days after the 10th day, it's still seen as inappropriate to play music and such like so, because time is getting short, we rearranged our lives, Raza from the newspaper joined us and we headed north.

The first bit outside Baghdad is the same flat brown expanse as almost the entire highway west towards Jordan. The hills start suddenly as if the person commissioned to put them there was day dreaming, suddenly jerked awake and hacked out a few stunted dips in the landscape before getting into the artistry of it all. Kids ran about in fields while grown ups picked stuff, bright green stuff that seems beyond imagining after Baghdad.

True enough, if you stand on a high enough roof, Baghdad is a carpet of green, with blue and gold and white domes poking through, but the green of the palms is coated with grime, dust, glued on by oily residues that thicken the air. It's not this kind of green.

We had to stop at every single checkpoint except one and there were lots. Raza and Firas, the driver, seemed quite pleased to tell them we were a circus. A soldier tried to steal my bubbles for his kids, but they're the last ones left. Two US soldiers thanked us, said they were trying to do the same thing as we are: "We give the kids candy to try to win their trust." So, not quite the same thing then.

You arrive in Kurdistan and then, because of the way the lines are drawn, you leave again and pass through Kirkuk, which was not part of the Kurdish autonomous zone demarcated in 1991. The hills around Kirkuk have an acne of tall thin chimneys spouting bright orange flames, columns of smoke behind the horizon signifying more oil flares further away. There was too much oil in Kirkuk to give control of it to the Kurds and, after the 1991 war, unprotected Kurds were forced out by Saddam, their former homes given to people from elsewhere in Iraq. After the coalition invasion there were violent disputes over territory and ownership of particular houses. When I suggested going there to do shows, Raza said it was too dangerous. There are terrorists.

Erbil is a small city which has grown around an ancient walled medina, the walls gracing the top of a green hill in the centre, a winding bazaar to one side of the newer part, an enormous statue of a man sitting half way up the slope to the old part. A photographer works beside the statue, schoolboys and young men climb onto it, for fun or to pose. His other backdrop is a canvas, hung from the wall, of distant mountains which could be Kurdish, except that the cottage in the foreground is unmistakeably Alpine.

The language is different. Most young to middle aged adults speak at least some Arabic, though many of the old men understand Kurdish, Farsi, Turkish and no Arabic at all. A lot of the men wear the traditional Kurdish outfit of huge balloon trousers and a jacket, tucked into the trousers with a sash around the waist so that it looks like a loose jumpsuit. The music is different and there are no tanks on the streets. The last US soldiers I saw were the ones at the checkpoint, hours before Erbil. Instead there are occasional Mine Action Group vehicles.

Police and Peshmerga soldiers walk around singly, still carrying big guns but nothing like the four-to-a-car pack movements of the Baghdad police force. Things are infinitely more chilled here, although we were still told to be careful at night, that it's dangerous, better to be home before dark. In any case most things are closed by night, unlike Karrada, where food stalls start to open up at dusk.

The shop mannequins have beards. Some of them are just painted on, like the rest of the facial features; others actually have ginger bristles attached. Ginger hair is common here and green or blue eyes. The roar of generators is mostly absent. Electricity goes off for the same couple of hours every day, twice a day, so people are able to work around it, whereas in Baghdad it comes and goes erratically and elsewhere, like Ramadi when collective punishment is in force, it's barely on at all.

The first task was to go to the police station and get travel and residence permits for Kurdistan. We dropped our passports off when we arrived, in exchange for a yellow piece of paper, and went back for them, equipped with passport photos, in the morning. I'll spare you the interminable details of form filling, English to Arabic to Kurdish; eventually we were asked for $60. It seemed it was an admin fee although possibly it was some sort of refundable deposit for good behaviour.

Either way we didn't have that much money to spare so we offered them magic tricks instead. We'd been filling time with the guards outside and they followed us into the room with the desk and armchairs, asking for more. Alright, but this one will cost $60. It was a deal. If we could impress them with some circus tricks they'd let us off the money.

Fisheye commissioned a volunteer and had him take off his jacket, a big leather thing he was evidently proud of. Borrowing the man's cigarette, he pressed it into the fabric. The owner let out a small whimper, swallowed hard and managed to say, "OK" while the others' mouths hung open. I know the scam, but still I had to bite my lip and hope there was no way it could go wrong.

The wisps of smoke died out and Fisheye put his hand into his pocket to fetch some invisible magic dust to sprinkling over the wounded jacket, which he then held out, unscathed.

"Wallah!" {My God], in chorus.

OK. We were going to get out alive; maybe even uncharged, given the wide eyes. Clutching his coat, our man looked everywhere for the burn, for the cigarette, for the secret. Where was the cigarette, everyone wanted to know. "Rahid" [gone]. We all gestured dissolution into thin air, shrugged: "Huwa sahar," he is a magician.

Peat was, for once, without ping pong balls so he scoured his pockets for small things: a bottle of shower gel, a stray bean bag and a roll of tape. Sadly we had to leave cameras outside, or I'd post photos of the soldiers' faces, gaping at Peat juggling like they'd never seen a man throw three objects in the air and catch them in all their lives. I plundered the desk-tidy and threw him a tippex container for a daring attempt at four balls. A couple of cartwheels drew wild applause. It had to be time for the Piece de Resistance.

"Can I borrow your Kalashnikov?"

Emptied of ammunition, the automatic rifle went on Peat's chin, point downwards because it's easier to balance things that are top heavy. He moved about a bit to make it look harder, like he was having to make some effort to keep it there. Looking back, I suppose we ought to have learnt the Kurdish for "Don't try this at home lads," because you could see them all thinking this would really impress the wife and wondering how long it was going to take them to master it.

Still the outcome of it all was four official papers bearing our photos and entitled "Kurdistan Region Ministre of Interior. Trevleng and Stayng" and no fee. "But where did the cigarette go?" they were still begging as they followed us to the taxi, geezer still sneaking surreptitious looks into his coat pockets and under the collar.

In Baghdad, when we announced that we were going north, people asked us why. "The children there are all right. They don't have problems." The reaction of the grown men in the police station says they, never mind the children, have never seen anything like this. It's easy to forget, in the more obvious post war chaos of the centre and south, that the north also suffered twelve and a half years of sanctions.

Boys sell chocolate and toys on the streets, standing at stalls, wheeling wooden carts over broken pavements or winding their way between cars at traffic intersections. A young lad with horrific scars pulling his face and body out of shape adopted and followed us. The shoe shiners are all adult men and, like Baghdad, any car is a potential taxi. The US and UK carried out bombing raids in the northern and southern no-fly zones throughout their existence and turned an unsubtle blind eye to frequent Turkish military incursions along its border.

Certainly the Kurdish region suffered less under the sanctions than the rest of the country, which backers of the sanctions put down to the administration of the Oil for Food programme in that region by the UN rather than the Iraqi government. Undoubtedly Saddam worsened people's suffering but that explanation ignores the much greater resources available through the programme in the north.

Firstly there was more money per head in the north. The money raised through oil sales was divided on a percentage basis. If, say, 20% of the population was living in the north, and I've no idea what the actual percentage was, then 20% of the money was given to the administration in the north. From the remaining funds the deductions were made: a percentage for administration costs and almost a quarter of the gross revenue for the compensation account, to pay reparations to often wealthy oil companies in Kuwait and so on. What was left could be spent on all of the basic needs, food, water, health, electricity, education and other infrastructure for the entire centre and south of the country.

Secondly there was a cash component to the assistance for the north. While the rest of the country could only issue credit notes for goods, the north had some hard cash to pay workers, to buy local components and so on, both boosting the local economy and enabling regeneration work to be done much more cheaply. Increasing clean water output by a cubic litre costs several times more when a foreign company is importing everything than when local businesses supply parts and labour.

There were negotiations over including a cash component for the rest of the country but, if Saddam was obstructive, equally they were not held in good faith by the US and UK controlled sanctions committee.

Another factor is the much greater assistance of international NGOs in the north. Peat and I arrived at an orphanage for boys, whose address Raza gave us. A sign outside said UNICEF. Other signs had the names of other organisations from around the world but we were distracted from a closer look by a small boy arriving at the gate from outside and beckoning us in, around a crumbling guard's cabin to a patch of grass and weeds.

There was a young man on a chair, a couple of kids playing around his head. I explained that we were a circus, which was a surprise and he fetched his mate to make sure. The manager was off and about half the boys had gone to family for the Friday holiday. The remaining fifteen or so screamed and giggled and ran after bubbles. There were apparently no toys at all.

They took us inside. The windows in the boys' rooms were patches of jagged glass, the rest lying on the ground outside. Karovan explained that an American organisation is doing some refurbishment, has mended the boys' beds and given them blankets, but still there is thick dust all over the floor in the rest of the building. One corner is filled with broken cupboards, another with bits of furniture, either part built or part collapsed.

A generator in the yard was a gift from Peace Winds of Japan, a sign announcing that they'd run summer camps in 1997 and 1998 and given the generator a year later. There was no update. Looking closer, the signs from the different NGOs were chipped, peeling, several years old. Karovan said the orphanage had never been run by Unicef, just they'd given some help with something at some point.

The home was built by Saddam, Karovan said, because he wanted to help all the children whose parents were dead. Perhaps one parent had died, perhaps the other had remarried, perhaps both were dead. After 1991 it was not run by the Iraqi government any more. Some Kurdish organisations helped them as well as the international groups.

Karovan is a student in the College of Law and Political Science. He stays there because he can't afford the student hostel. He's got a room, a thin mattress on the floor, a desk piled with books. He introduced others who arrived while we were there. A fellow student from the College of Economics, a telephone engineer who works nearby, all helping to look after the boys in exchange for a room.

The boys were clean enough, seemed healthy and of course a place on a Thursday afternoon might not be representative of the rest of the week but it's hard to understand why, when NGOs have had relatively free access, the place is in such a state, why little boys are living in a structure somewhere between half built and half fallen down.

We gather a crowd everywhere we go, not least because we keep making random things appear and disappear. In the bazaar we found ourselves in a slightly complicated conversation in a hybrid German and Arabic, churned together in the same sentence, lapsing into English on my side, Kurdish on his, whenever we couldn't think of the appropriate word in any other language, a fascinated crowd surrounding the clothes shop to listen and watch the foreigners drinking tea.

There's an English phrase common in Baghdad: "This is the freedom," generally said with sarcasm whenever someone is doing something ridiculous or oppressive. The freedom, from Saddam at least, has been here for several years now and I've been groped twice in two days here, compared with once in four months in Baghdad. Maybe this is the freedom. But I'm happy to be Erbil and not Baghdad these few days.