Sunni Islamic State militants pursued their advance in the north of Iraq Sunday, capturing strategic territory close to the Turkish and Syrian borders, including Iraq's biggest dam, an oil field and two more towns.
Islamic State was able to inflict their first major defeat on Kurdish forces since sweeping through the region in June
Local officials said militants with the extremist group Islamic State took control of the towns of Zumar and Sinjar near the city of Mosul on Sunday, waging fierce clashes with Kurdish forces.
The area near the Sinjar Mountains is inhabited by the mostly Kurdish-speaking Yazidi minority, which is scorned by its Sunni neighbors.
Ashirqiya TV reported that hundreds of Yazidi families fled to Daouk for fear of persecution by the Sunni militants.
The French news agency AFP quoted a United Nations spokesman saying 200,000 people have fled Sinjar and said there are grave concerns for their safety.
Capture of the Mosul Dam after an offensive of barely 24 hours could give the Sunni militants the ability to flood major Iraqi cities, sharply raising the stakes in their bid to topple Prime Minister Nouri al-Maliki's Shi'ite-led government.
"The terrorist gangs of the Islamic State have taken control of Mosul Dam after the withdrawal of Kurdish forces without a fight," said Iraqi state television.
However, one Kurdish official disputed the claim that the Islamic State controls the dam.
The militants have also been fighting in recent days to capture the town of Haditha, which is the site of another strategic dam, capable of flooding vast areas of the country.
Both dams are key components of Iraq's electricity grid and their loss would cause major disruptions to the country's power supply.
Hilal Khashan, who teaches political science at the American University of Beirut, said the militants are slowly advancing in areas that are easily within their reach.
"Their main concern right now is to consolidate their hold in the parts of Iraq that they already control and gain access to more oil fields," Khashan said.
"Their recent advances during the past two days focused on taking over the tri-border area between Turkey, Iraq and Syria, and they took it. Today, they advanced south of it to Sinjar mountains," he added.
Islamic State, which sees Iraq's majority Shi'ites as apostates who deserve to be killed, also seized the Ain Zalah oil field, adding to four others already under their control, and two towns.
They faced strong Kurdish resistance only at the start of their latest offensive when taking the town of Zumar. The Islamists then hoisted their black flags there, a ritual that usually precedes mass executions of their captured opponents and the imposition of an ideology even al-Qaida finds excessive.
The al-Qaida offshoot, which swept through northern Iraq in June almost unopposed by the U.S.-trained army, poses the biggest challenge to the stability of Iraq since the fall of Saddam Hussein in 2003.
After thousands of Iraqi soldiers fled the Islamic State offensive, Shi'ite militias and Kurdish fighters emerged as a key line of defense against the militants, who have threatened to march on Baghdad.
Kurdish forces had poured in reinforcements, including special forces, to Zumar, where they battled Islamic State fighters who had arrived from three directions on pickup trucks mounted with weapons, residents said.
In a statement on its website, Islamic State said its fighters killed scores of Kurdish fighters in a 24-hour battle and then took over Zumar and 12 villages.
"Hundreds fled leaving vehicles and a huge number of weapons and munitions and the brothers control many areas," Islamic State said. "The fighters arrived in the border triangle between Iraq, Syria and Turkey."
An official in the Northern Oil Company said Islamic State fighters had taken control of the Ain Zalah oil field and two other undeveloped fields - Batma and Sufaiya.
The U.N. special envoy to Iraq, Nickolay Mladenov, said Kurds and the federal government "should urgently restore their security cooperation in dealing with the crisis."
The peshmerga are widely perceived as Iraq's best organized and most efficient military force, but the autonomous Kurdish region has been cash-strapped and its troops stretched.
Its regional government has not been receiving the 17 percent share of national oil revenues it is owed by Baghdad and is struggling to sell its own, smaller, production independently.
According to a senior official, a Kurdish delegation is currently in the United States to demand military equipment.