Iraqi forces set to surround Mosul’s Old City in final showdown with Islamic State militants

Iraqi forces have nearly encircled the Islamic State's stronghold in Mosul's Old City after retaking a neighbouring district on Thursday.

Iraq's military said it had captured the Bab Sinjar neighbourhood from IS fighters and need to take full control of Medical City, a complex of hospitals further north along the bank of the Tigris, to fully surround the historic Old City.

The United Nations said Friday that Islamic State militants may be holding more than 100,000 Iraqi civilians as human shields in the Old City.

"We know that ISIS moved them with them as they left… locations where the fighting was going on," the UN refugee agency's representative in Iraq, Bruno Geddo, said.

With virtually no food, water or electricity left in the area, the civilians are "living in an increasingly worsening situation of penury and panic," he added.

The fall of Mosul would effectively mark the end of the Iraqi section of the "caliphate" declared by the Islamic State leader Abu Bakr al-Baghdadi in 2014 from an historic mosque in the Old City.

An offensive to retake the northern Iraqi city started in October 2016, with a US-led coalition providing ground and air support for Iraq's army and militia groups.

Iraqi force recaptured eastern Mosul in January and a month later began operations to retake the western side where around 200,000 civilians remained trapped behind Islamic State lines.

Residents attempting to flee IS positions have been gunned down by snipers, while in some cases civilian homes have been welded shut and booby-trapped to prevent them from fleeing.

Human rights groups say Iraqi armed forces and the pro-government militias such as the Hashed al-Shaabi have been responsible for mass executions during military operations.

About 800,000 people, more than a third of the pre-war population of Mosul, have already fled the city to seek refuge with friends and relatives or in camps.

Agencies contributed to this report