Militants seize Iraqi city Tal Afar
Sunni militants have seized the northern Iraqi buffer city of Tal Afar, officials and residents say.
Militants led by ISIS - the Islamic State in Iraq and the Levant - captured key cities including Mosul and Tikrit last week, but some towns were retaken.
Fighting in Tal Afar began on Sunday, with mortar shelling of some districts as militants tried to enter the city.
The Iraqi military setback came as the US said it was considering direct talks with Iran on Iraq.
US President Barack Obama is weighing up options on action to take in Iraq.
The USS George HW Bush aircraft carrier is already being deployed to the Gulf, accompanied by two more warships. But Washington says no US troops will be deployed on the ground.
Iranian President Hassan Rouhani has said he will consider co-operation if the US takes action in Iraq.
MIXED CITY
Tal Afar is a mainly Shia and ethnic Turkmen city, and seen as a buffer against militant-controlled territory in Iraq and Syria.
A Tal Afar resident reached by phone has told the Associated Press news agency that militants in pick-up trucks mounted with machine guns and flying black jihadi banners were roaming the streets as gunfire rang out.
"Residents are gripped by fear and most of them have already left the town to areas held by Kurdish security forces," said Hadeer al-Abadi, as he prepared to head out of town with his family.
The Iraqi government claims to have "regained the initiative" against an offensive by Sunni rebels.
Earlier, Iraqi army spokesman Lt Gen Qasim Ata said the military had scored successes against the militants in several areas, killing 279 of them. The figure could not be independently verified.
Local TV stations say government helicopters carried out a raid during the night on a military base near Mosul, which was captured by the militants last week.
Government forces were reported to be building up in the city of Samarra, north of Baghdad, ready for a counter-offensive on Tikrit.
'HORRIFYING'
Meanwhile, the US condemned as "horrifying" photos posted online by Sunni militants that appear to show fighters massacring Iraqi soldiers.
In the scenes, the soldiers are shown being led away and lying in trenches before and after their "execution".
The Iraqi military said the pictures were real, but their authenticity has not been independently confirmed.
The BBC's Jim Muir, in northern Iraq, says if the photographs are genuine, it would be by far the biggest single atrocity since the time of the American-led invasion of Iraq in 2003.
The United States has begun evacuating some diplomatic staff from Baghdad, moving them to Kurdish-controlled territory in the north-east and to Basra in the south.
The US has also announced it is increasing security at its embassy in Baghdad and relocating some staff to safer areas.
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