The Iraqi army says it has held off a fierce assault by the Islamic State of Iraq and the Levant (ISIL) on the city of Ramadi.
The claim comes amid an announcement by the Iraqi government that it will triple its defence budget in an effort to defeat the group.
Ramadi is one of the last major urban areas in the crucial Anbar province under Baghdad's control. ISIL holds thousands of kilometres of territory across Iraq, posing a threat to Kirkuk, Diyala and Salahuddin besides Anbar.
Iraqi security forces, backed by tribesmen, managed to defend a government complex in the city on Thursday, in the latest in a series of drives which have seen the return of some territory lost to ISIL, army officials said.
"We were able to stop the militants from advancing in the government complex," army Colonel Haytham al-Daraji told AFP news agency.
Daraji said more than 10 air strikes were carried out against ISIL positions in Al-Hoz, an area from which security forces had previously withdrawn, which allowed ISIL to advance to within striking distance of the key government buildings.
Four members of the security force were killed and 21 wounded, medical officials said, as the government deployed reinforcements to the city.
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Al Jazeera's Imran Khan, reporting from Baghdad, said the fight for Kirkuk is typical of ISIL's tactics seen previously: "When they get pushed out of an area, they take refuge on a countryside, and that's proving problematic for the Iraqi forces, because the fight is for the towns."
But he added that the Iraqi army still has the upper hand because they control much of the area, with the help of the Kurdish Peshmerga forces.
Ramadi has been in danger of falling to ISIL several times this year, and is a key city for ISIL as it seeks to consolidate its grip over all of Anbar.
"If we lose Anbar, that means we will lose Iraq," Ahmed al-Dulaimi, Anbar's governor, told Al Anbar television from Germany, where he is recovering after being wounded by a mortar round in September.
Parts of Anbar, which borders Saudi Arabia, Jordan, Syria and the Baghdad governorate, have been out of government control since January.
The progress came as the Iraqi army reportedly captured the Jurf al-Sakhr area south of Baghdad, an area frequented by millions of Shia pilgrims while visiting the shrine city of Karbala
The Iraqi army also made important gains in the Baiji, Jalawla and Saadiyah areas north of the capital.
However, ISIL still holds large areas of the country, including the key cities of Mosul, Tikrit and Fallujah.
Meanwhile, Hoshiyar Zebari, Iraq's finance minister, is asking for nearly a quarter of next year's budget to be devoted to defence.
"Definitely we will recommend strongly that there should be some serious deep-rooted reforms in the military security establishment to fight corruption, mismanagement, to make sure that they get the right weapons, they get the right salaries, they get the right support," Zebari told Reuters news agency.