Iraqi government forces and Shi'ite militias seized control of the strategic town of Jurf al-Sakhar near Baghdad from Islamic State on Saturday and Kurdish fighters made gains in the north after heavy coalition air strikes against the Sunni militants.
Iraqi troops and their Shi'ite allies broke the grip of Islamic State in Jurf al-Sakhar after months of fighting against insurgents determined to march on the capital.
"Our forces with the support of the volunteers are in total control over Jurf al-Sakhar now and the terrorists fled to the southwest areas of the town," a spokesman for security forces there said.
A victory could allow Iraqi forces to prevent the Sunni insurgents - positioned in several locations around Baghdad - from edging closer to the capital, sever connections to their strongholds in western Anbar province and stop them infiltrating the mainly Shi'ite south.
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The security officials said the Sunni insurgents fled to the two nearby villages of al-Farisiya and Hay al-Askari and were still attacking with sniper fire and mortars. Government forces were preparing for a major overnight operation against them.
In the latest fighting, 67 members of the Iraqi security forces and Shi'ite militias as well as 300 Islamic State fighters were killed, the officials said.
It was not possible to get independent verification of the casualty tolls in the town 60 km (40 miles) south of Baghdad.
Speaking to state television in the town, Prime Minister Haider al-Abadi said Iraqis forced out by fighting would soon return to their homes.
Islamic State swept through northern Iraq in the summer, facing little resistance from U.S.-trained government troops.
The al Qaeda offshoot then declared a caliphate and threatened to reach Baghdad, rattling the Shi'ite-led government and intensifying sectarian bloodshed.
On Saturday, a suicide bomber killed seven Shi'ite militiamen in a town just north of Baghdad, police and medical sources said.
Islamic State controls large parts of the Sunni heartland in Iraq's western Anbar province, as well as swathes of Syria and wants to redraw the map of the Middle East.
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