ERBIL, Iraq (Reuters) - Political uncertainty hung over Iraq's Kurdistan region on Thursday after President Massoud Barzani's mandate expired without rival factions reaching an agreement to extend his term.

Weeks of wrangling between the autonomous region's parties failed to produce a compromise before Barzani's tenure officially ended at midnight on Wednesday, despite a last-minute intervention by U.S. and British diplomats.

The stalemate over the presidency, which Barzani has held for more than a decade, is testing Kurdish unity at a time of acute economic hardship, when Iraq itself is being pulled apart by Islamic State.

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No party presented an alternative candidate for the position, but several factions nonetheless refused to prolong Barzani's mandate unless changes were made to the political system that would reduce the powers of his office.

Barzani's Kurdistan Democratic Party (KDP), which is the largest and strongest in the region and therefore has most to lose, has so far rejected that.

Now that the deadline has passed, members of the Gorran party, which has pushed for the system to be changed, say that by law the speaker of parliament now assumes presidential powers for the next 60 days until elections are held.

"There are two different interpretations of the law," said KDP member of parliament Farsat Sofi. "We have an ongoing presidency crisis, but there is no vacuum: the president of the Kurdistan region is still fully in power".

Meetings between the parties are due to continue in the coming days.

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"From a legal point of view, as of today we have no president," said Hakim Sheikh Latif, a former member of the Iraqi parliament from the Gorran party.

(Reporting by Isabel Coles; Editing by Ruth Pitchford)