Iraqi Kurdish forces have exchanged heavy fire with ISIL fighters as they move from two directions into the centre of Bashiqa, a town along a key supply route for the armed group on the way to Mosul.
The offensive to reclaim the town 13km east of Mosul city is the latest push in a broader offensive to drive the Islamic State of Iraq and the Levant out of Iraq's second-largest city, the group's last major stronghold in the country.
Combat began at dawn on Monday with a Kurdish barrage of heavy artillery, Katyusha rockets, and mortar rounds striking ISIL positions, providing cover for the advance of armoured columns.
"Peshmerga fighters tell us they've retaken most of Bashiqa now," Al Jazeera's Mohammed Jamjoom reported from about 2.5km away.
He said troops had secured the municipal building in the centre of Bashiqa .
However, by late Monday, the battle still raged on.
"We're still hearing heavy fighting going on: street battles, gunfire, there's been air strikes happening as well. So it seems, at this hour, the fight is still intensifying," our correspondent said.
Bashiqa is believed to be largely deserted except for dozens of ISIL fighters.
"We have the coordinates of their bases and tunnels, and we are targeting them from here in order to weaken them so that our forces can reach their targets more easily," Peshmerga commander Brigadier-General Iskander Khalil Gardi told the Associated Press news agency.
Concerns about civilians do not play a role in operations in Bashiqa, Gardi said.
"Regarding the challenges, in any area that has no civilians, there won't be any problem. And currently, according to our intelligence, there are no civilians left in Bashiqa," he said.
Iraqi government and Kurdish forces, backed by a US-led coalition and joined by various militias, are fighting to drive ISIL, also known as ISIS, out of Mosul's surrounding areas and open additional fronts to attack the main city, which has been held by the group since 2014.
Bashiqa has been surrounded by Kurdish forces for weeks, but Monday's push appears to be the most serious yet to drive ISIL out.
The United Nations has warned of a possible exodus of hundreds of thousands of refugees from Mosul, which is still home to as many as 1.5 million people.
So far 34,000 have been displaced, according to the International Organization for Migration.
Meanwhile, the UN health agency says it has set up 82 "rapid response teams" to manage risks of epidemics, chemical exposure, and other health worries among people fleeing Mosul.
|Nearly 34,000 people have been displaced by the offensive to push ISIL out of Mosul [Reuters]|
The World Health Organization said water and sanitation in camps for displaced people could "face disruptions" as the numbers of those fleeing Mosul grew, raising the risk of food and water borne diseases such as cholera.
On Mosul's southern front, Iraqi soldiers advanced into Hammam al-Alil, 20km from the city's centre.
Army spokesman Brigadier Firas Bashar said the city had been retaken, although fighting continued and other reports said ISIL fighters remained in several areas.
Iraqi Brigadier-General Yahya Rasool, spokesman for the Joint Military Command, told AP about 100 decapitated bodies were found in a mass grave near Hammam al-Alil.
Iraqi special forces entered the eastern edge of Mosul last week and have made some progress but have been slowed by fierce ISIL resistance as troops push into more densely populated areas.
Soldiers are suffering mounting casualties as ISIL fighters bog them down with suicide car bombs, booby traps, and close-quarter combat along narrow streets. ISIL still holds territory to the north, south and west of Mosul.
As Iraqi forces struggle to solidify gains in neighbourhoods in eastern Mosul, more and more civilians are fleeing the city, according to special forces Lieutenant-Colonel Hussein Aziz.
"Daesh is trying to draw a line," Aziz said of heavy fighting in Mosul's eastern-most neighbourhoods, referring to ISIL by its Arabic acronym.
"They have a lot of fighters there and they forced families to stay."
Aziz mans a small checkpoint on the edge of Gogjali, Mosul's eastern-most suburb, where civilians fleeing Mosul are screened to catch any ISIL fighters who may be hiding among them.
Since Iraqi forces first pushed into the east of the city last Tuesday, Aziz's team has arrested dozens of people.