Iraq's armed forces started an offensive against Islamic State in the northerly Nineveh province on Thursday in what a military statement described as the first stage of an operation aimed at liberating the city of Mosul.

The assault was launched from the Makhmour area, to which thousands of Iraqi troops have deployed in recent weeks, setting up base alongside Kurdish and US forces around 60 km south of Mosul.

Backed by air power from a US-led coalition and by Kurdish peshmerga forces, Iraqi troops advanced westwards, recapturing several villages from the Islamist militants, according to multiple military sources.

"The first phase of the Fatah (Conquest) Operation has been launched at dawn to liberate Nineveh, raising the Iraqi flag in several villages," said a military statement cited by state TV.

Iraqi officials say they will retake Mosul this year but, in private, many question whether the army, which partially collapsed when Islamic State overran a third of the country in June 2014, will be ready in time.

The city, home to 2mn people before being taken over by the ultra-hardline jihadist group, is by far the largest centre it controls in either Iraq or Syria, and is still heavily populated, complicating efforts to retake it.

The military statement urged civilians to stay away from buildings used by the insurgents, warning that they would be targeted in days to come.

"Iraqi security forces in Makhmour ... are beginning to expand the forward line of troops," said Colonel Steve Warren, a Baghdad-based spokesman for the US-led coalition.

Makhmour is located in a strategic triangle of territory between Islamic State's core area of control in northwestern Iraq and the Hawija area, from which the militants have threatened oil installations around Kirkuk.

Thursday's advance brings Iraqi forces closer to the oil town of Qayyara on the banks of the river Tigris, control over which would help to isolate Hawija from Mosul.

A Shia militia leader met Kurdish peshmerga commanders last week to discuss plans to push the insurgents out of the Hawija area together with the Iraqi army.

The offensive should also reduce the threat to the base in Makhmour, which has come under repeated attack from Islamic State, resulting in the death of a US Marine last week.

The Iraqi military statement named the villages recaptured as al-Nasr, Garmandi, Kudila and Khurburdan.