A car bomb explosion at a bus terminal south of Baghdad has killed at least five people and injured seven others, police sources told Al Jazeera.

The attack took place on Sunday morning in the town of Yusufiyah, 20km south of the capital, police officials said.

All officials spoke on condition of anonymity, because they were not authorised to speak to journalists.

No one immediately claimed responsibility for the blast.

Iraq is facing its worst crisis since the 2011 withdrawal of US troops as the Islamic State of Iraq and the Levant (ISIL) group is in control of about a third of the country.

Fight against ISIL

In a separate development, army forces supported by pro-government armed groups launched an offensive on the town of Sadiyah in Diyalah province in an attempt to re-take it from ISIL, a police source told Al Jazeera.

He said the main road and houses were booby trapped and the army forces were advancing slowly, however, some gains have been made on different fronts around the town, the source said.

Peshmerga forces in turn have also launched an offensive from their side in the town of Jalawlah, which is neighbouring Sadiyah.

Iraqi state TV reported that the army hoisted the Iraqi flags over both towns and was now in control of 75 percent of the area.

Al Jazeera sources were indicating that the fight was still ongoing and there were some gains for the Iraqi army and Peshmerga forces.

However, medical sources in Khanaqeen general hospital told Al Jazeera that 10 killed from Iraqi army, Peshmerga and Shia militias in the ongoing clashes.

Source: Al Jazeera and agencies