Militants from an al Qaeda splinter group have attacked a town housing Iraq's largest oil refinery, as more than 500,000 people fled an assault on the country's second city.
Some 250 guards at the refinery in Baiji withdrew to another town after the Islamic State of Iraq and the Levant (ISIL) militants sent a delegation of tribal chiefs to persuade them to pull out.
The militants, in around 60 vehicles, moved into the city overnight and released prisoners in the town.
An estimated 500,000 people have fled Mosul and the surrounding areaSecurity sources said insurgents had overran parts of the north of Tikrit on Wednesday and video footage showed fighting in Kirkuk.
Residents in Baiji said police officers and soldiers were warned not to challenge the fighters, who destroyed a court house and a police station.
Jasim al Qaisi said: "Yesterday at sunset some gunmen contacted the most prominent tribal sheikhs in Baiji and told them 'we are coming to die or control Baiji, so we advise you to ask your sons in the police and army to lay down their weapons and withdraw'."
ISIL fighters wave their flag at the Sykes Picot Border. Pic: albaraka_newsA senior government official said the production of crude oil in Iraq - which produces around 3.5 million barrels of oil per day - could be affected after the attack on Baiji.
It comes after the militants seized control of Iraq's second city Mosul on Tuesday, forcing an estimated 500,000 people to flee the area.
Gunmen, wearing military uniforms and all-black clothing, have been guarding banks and government buildings in the city and calling over loudspeakers for government employees to return to work.
Insurgents have struck in Mosul, Baiji, Tikrit and KirkukThe militants also seized the Turkish consulate in the city and reportedly kidnapped the head of the diplomatic mission and 24 staff members, according to police.
Families have made their way into the Kurdistan region, which has its own military force the Peshmerga.
Bodies of soldiers and policemen have been left in the street, according to reports.
People celebrate as ISIL fighters occupy Mosul. Pic: albaraka_newsOne officer said: "We can't beat them. We can't. They are well trained in street fighting and we're not.
"We need a whole army to drive them out of Mosul. They're like ghosts: they appear, strike and disappear in seconds."
Ninevah province governor Atheel al Nujaifi said on Wednesday authorities had a plan to restore security.
People queue at a border crossing into the Kurdistan regionPrime Minister Nouri al Maliki has asked parliament to declare a state of emergency that would grant him additional powers to tackle the crisis. He also appealed for help from the international community.
And Iraq's Foreign Minister, Hoshyar Zebari, has said Baghdad will co-operate with Kurdish forces to "flush out these foreign fighters".
Influential Shiite cleric Moqtada al Sadr has called for the formation of militia units to help defend religious sites in Iraq.
ISIL has made serious gains in Iraq in the last year, seizing control of the city of Falluja and parts of Ramadi.
The group is also fighting President Bashar al Assad's regime in Syria.
Led by Abu Bakr al Baghdadi, it was formed after a split with al Qaeda's international leader Ayman al Zawahiri.
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