By Babak Dehghanpisheh and Ahmed Rasheed
EAST OF MOSUL/BAGHDAD (Reuters) - Iraqi government forces launched a U.S.-backed offensive on Monday to drive Islamic State from the northern city of Mosul, a high-stakes battle to retake the militants' last major stronghold in the country.
Two years after the jihadists seized the city of 1.5 million people and declared a caliphate from there encompassing tracts of Iraq and Syria, a force of some 30,000 Iraqi and Kurdish Peshmerga forces and Sunni tribal fighters began to advance.
Helicopters released flares and explosions could be heard on the city's eastern front, where Reuters watched Kurdish fighters move forward to take outlying villages.
A U.S.-led air campaign has helped drive Islamic State from much of the territory it held but 4,000 to 8,000 fighters are thought to remain in Mosul.
Residents contacted by phone dismissed reports on Arabic television channels of an exodus by the jihadists, who have a history of using human shields and have threatened to unleash chemical weapons.
"Daesh are using motorcycles for their patrols to evade air detection, with pillion passengers using binoculars to check out buildings and streets," said Abu Maher, using an Arabic acronym for Islamic State.
He and others contacted were preparing makeshift defences and had been stockpiling food in anticipation of the assault, which officials say could take weeks or even months. The residents withheld their full names for security reasons and Reuters was not able to verify their accounts independently.
The United States predicted Islamic State would suffer "a lasting defeat" as Iraqi forces mounted their biggest operation in Iraq since the 2003 invasion that toppled Saddam Hussein.
But the offensive, which has assumed considerable importance for U.S. President Barack Obama as his term draws to a close, is fraught with risks.
These include sectarian conflict between Mosul's mainly Sunni population and advancing Shi'ite forces, and the potential for up to a million people to flee Mosul, multiplying a refugee crisis in the region and across Europe.
"We set up a fortified room in the house by putting sandbags to block the only window and we removed everything dangerous or flammable," Abu Maher said. "I spent almost all my money on buying food, baby milk and anything we might need."
Qatar-based al-Jazeera television aired video of what it said was a bombardment of Mosul that started after a speech by Prime Minister Haider Abadi, showing rockets and bursts of tracer bullets across the night sky and loud sounds of gunfire.
"I announce today the start of the heroic operations to free you from the terror and oppression of Daesh," Abadi said on state TV.
"We will meet soon on the ground in Mosul to celebrate liberation and your salvation," he said, surrounded by commanders of the armed forces.
KURDISH FIGHTERS
The commander of the coalition, U.S. Lieutenant General Stephen Townsend, said the operation to take Iraq's second largest city would likely continue for weeks, "possibly longer".
If Mosul falls, Raqqa in Syria will be Islamic State's last city stronghold.
"This is a decisive moment in the campaign to deliver ISIL a lasting defeat," U.S. Defense Secretary Ash Carter said in a statement, using another acronym for Islamic State.
"We are confident our Iraqi partners will prevail against our common enemy and free Mosul and the rest of Iraq from ISIL's hatred and brutality."
Islamic State has been retreating since the end of last year in Iraq, where it is battling U.S-backed government and Kurdish forces as well as Iranian-backed Iraqi Shi'ite militias.
But in a blow to the anti-IS campaign, last week the jihadists crushed a planned rebellion within its ranks in Mosul intended to ease the recapture of the city.
The Iraqi Kurdish military command said 4,000 Peshmerga were taking part in an operation to clear several villages held by Islamic State to the east of Mosul, in an attack coordinated with a push by Iraqi army units from the southern front.
The Iraqi army media office said advancing troops destroyed a number of Islamic State defence lines and strikes by Iraqi and coalition jets hit militant positions.
A column of black smoke was rising from one IS position on the eastern front, a Reuters correspondent said, apparently from burning oil being used to block the path of the Kurds and obstruct the jets' view.
"We are the real Muslims, Daesh are not Muslims, no religion does what they did," said a young Kurdish fighter in battle dress as he scanned the plain east of Mosul from his position on the heights of Mount Zertik.
As he spoke a Humvee drove by with the word Rojava, or Syria's Kurdistan, painted on the protection plate of the machine gun turret.
"This is all Kurdistan," Major Shiban Saleh, one of the fighters onboard, said. "When we’re done here, we will chase them to Raqqa or wherever they go," he said.
He said about 450 Syrian Peshmerga fighters were involved in the offensive east of Mosul, which aims to take back nine villages during the day.
Abdul Rahman Waggaa, a member of the exiled Provincial Council of Nineveh of which Mosul is the capital, told Reuters the advancing forces had yet to enter the city: "Activities are still outside of Mosul and the operation is not at full strength yet."
HUMANITARIAN CRISIS FEARED
Early on Monday, Abadi sought to allay fears that the operation would provoke sectarian bloodletting, saying that only the Iraqi army and police would be allowed to enter the mainly Sunni city. He asked Mosul's residents to cooperate with them.
Local Sunni politicians and regional Sunni-majority states including Turkey and Saudi Arabia warned that letting Shi'ite militias take part in the assault could spark sectarian violence. To avoid such an outcome, Shi'ite irregulars had been deployed to help storm a smaller city in northern Iraq, raising fears of retribution there.
The Iraqi army dropped tens of thousands of leaflets over Mosul before dawn on Sunday, warning residents that the offensive was imminent. The leaflets assured the population that advancing army units and air strikes "will not target civilians" and told them to avoid known locations of Islamic State militants.
Reflecting authorities' concerns over a mass exodus that would complicate the offensive and worsen the humanitarian situation, the leaflets told residents "to stay at home and not to believe rumours spread by Daesh" that could cause panic.
Resident Abu Abdullah said he had wanted to witness the beginning of the offensive.
"We heard repeated explosions at a distance, so I went to the rooftop to see fireballs, even if it was dangerous. I was happy that the operation to liberate Mosul started," he said.
In 2014, Islamic State leader Abu Bakr al-Baghdadi proclaimed a "caliphate" in Iraq and neighbouring Syria from Mosul's Grand Mosque.
Russian President Vladimir Putin, criticised over the level of civilian casualties during Syrian government operations backed by Moscow in and around the city of Aleppo, said on Sunday he hoped the United States and its allies would do their best to avoid hitting civilians in the attack on Mosul.
The United Nations last week said it was bracing for the world's biggest and most complex humanitarian effort in the battle for Mosul, which could leave up to 1 million people homeless and see civilians used as human shields or even gassed.
There are already more than three million people displaced in Iraq as a result of conflicts involving Islamic State. Medicine is in short supply in Mosul and food prices have risen sharply.
"Families in Mosul started stockpiling food yesterday in case the fighting reaches our streets and we can no longer go out," said Saeed, a resident.
"Daesh are still in Mosul and it's not true that they left. They are continuing to erect blast walls in the streets to obstruct any advance."
(With additional reporting by Maher Chmaytelli in Baghdad and Michael Georgy in Erbil; writing by Philippa Fletcher; editing by Giles Elgood and Gareth Jones)