Iraq conflict: ISIS fighters seize Mosul Dam, oilfield and 3 towns

Islamic State fighters seizedcontrol of Iraq's biggest dam, an oilfield and three more townson Sunday after inflicting their first major defeat on Kurdishforces since sweeping across much of northern Iraq in June.

Capture of the electricity-generating Mosul Dam, after anoffensive of barely 24 hours, could give the Sunni militants theability to flood major Iraqi cities or withhold water fromfarms, raising the stakes in their bid to topple Prime MinisterNuri al-Maliki's Shia-led government.

"The terrorist gangs of the Islamic State have taken controlof Mosul Dam after the withdrawal of Kurdish forces without afight," said Iraqi state television.

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The swift withdrawal of Kurdish "peshmerga" troops was anapparent severe blow to one of the only forces in Iraq that
until now had stood firm against the Sunni Islamist fighters whoaim to redraw the borders of the Middle East.

The Islamic State (formerly known asIslamic State in Iraq and Syria, or ISIS), which sees Iraq's majority Shiasapostates who deserve to be killed, also seized the Ain Zalahoilfield adding to four others already under its control thatprovide funding for operations and three towns.

Initially strong Kurdish resistance evaporated after thestart of an offensive to take the town of Zumar. The Islamists
then hoisted their black flags there, a ritual that has often preceded mass executions of their captured opponents and theimposition of an ideology even al-Qaeda finds excessive.

The group, which has declared a caliphate in parts of Iraqand Syria to rule over all Muslims, poses the biggest challengeto the stability of OPEC member Iraq since the fall of SaddamHussein in 2003.

Fighting for towns

On Sunday, its members were also involved in fighting in aborder town far away in Lebanon, a sign of its ambitions acrossthe frontiers of the Middle East.

It controls cities in Iraq's Tigris and Euphrates valleysnorth and west of Baghdad, and a swathe of Syria stretching from
the Iraqi border in the east to Aleppo in the northwest.

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Iraq's Kurds, who rule themselves in a northern enclaveguarded by the "peshmerga" units, had expanded areas under theircontrol in recent weeks while avoiding direct confrontation withthe Islamic State, even as Iraqi central government troops fled.

But the towns lost on Sunday were in territory the Kurds hadheld for many years, undermining suggestions that the IslamicState's advance has helped the Kurdish cause.

Witnesses said Islamic State fighters were also trying totake control of the town of Rabia near the Syrian border and
were engaged in clashes with Syrian Kurds who had crossed thefrontier after Iraqi Kurds withdrew.

The latest gains have placed Islamic State fighters nearDohuk Province, one of three in the autonomous Kurdish region,which has been spared any serious threat to its security whilewar raged throughout the rest of Iraq.

Since thousands of U.S.-trained Iraqi soldiers fled theIslamic State offensive, the Kurdish fighters were seen
alongside Shiamilitia to the south as the main lines ofdefence against the militants, who vow to march on Baghdad.

By calling into question the effectiveness of the Kurdishfighters, Sunday's advances may increase pressure on bickeringIraqi leaders to form a power-sharing government capable ofcountering the Islamic State.

Little resistance

Two people who live near Mosul Dam told Reuters Kurdishtroops had loaded their vehicles with belongings including air
conditioners and fled.

Islamic State fighters attacked Zumar from three directionsin pickup trucks mounted with weapons, defeating Kurdish forcesthat had poured reinforcements into the town, witnesses said.

The Islamic State later also seized the town of Sinjar,where witnesses said residents had fled after Kurdish fightersput up little resistance. It was not immediately clear why theKurds, usually known as formidable fighters, pulled back withouta fight.

On its Twitter site, the Islamic State posted a picture ofone of its masked fighters holding up a pistol and sitting atthe abandoned desk of the mayor of Sinjar. Behind him was theimage of a famous Kurdish guerrilla leader.

In a statement on its website, the Islamic State said it hadkilled scores of peshmerga, the Kurdish fighters whose namemeans "those who confront death". Those deaths could not beindependently verified.

"Hundreds fled leaving vehicles and a huge number of weaponsand munitions and the brothers control many areas," the IslamicState statement said. "The fighters arrived in the bordertriangle between Iraq, Syria and Turkey."

The Islamic State has systematically blown up Shiamosques and shrines in territory it has seized, fuelling levels
of sectarian violence unseen since the very worst weeks ofIraq's 2006-2007 civil war.

The grouphasstalled in its drive to reach Baghdad, halting just before thetown of Samarra, 100 km north of the capital.

Islamic State advances

The Islamic State has been trying to consolidate its gains,setting its sights on strategic towns near oil fields, as well
as border crossings with Syria, so that it can move easily backand forth and transport supplies.

So far, the Islamic State is not near the major oilfieldsof the northern city of Kirkuk, which were seized by the Kurdsin the chaos that followed the Islamic State's advance. Itcontrols part of a pipeline from Kirkuk to Turkey which has beenidle for months because of its attacks in the area.

The Islamic State has capitalized on Sunni disenchantmentwith Maliki by winning support or at least tolerance from somemore moderate Sunni communities in Iraq that had fought againstal-Qaeda during the U.S. "surge" offensive of 2006-2007.

Maliki's opponents say the prime minister, a ShiaIslamist who is negotiating to try to stay in power for a third
term after an inconclusive parliamentary election in April, isto blame for galvanizing the insurgency by excluding Sunnis frompower. Kurdish leaders have also called for Maliki to step downto create a more inclusive government in Baghdad.

The Kurds have long dreamed of their own independent state,an aspiration that has angered Maliki, who has frequently
clashed with the non-Arabs over budgets, land and oil.

In July, the Kurdish political bloc ended participation inIraq's national government in protest against Maliki's
accusation that Kurds were allowing "terrorists" to stay inArbil, capital of their semi-autonomous region.