Iraqi army says it reached center of key town south of Mosul

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The army, backed by local police and Sunni Muslim tribal fighters, were still clashing with the ultra-hardline jihadists after taking control of the mayor's office, the municipal building and the hospital, said a source from the Salahuddin Operations Command, which oversees military operations in the area.

Shirqat, on the Tigris river 100 km (60 miles) south of Mosul, has been surrounded by Iraqi troops and Iranian-backed Shi'ite Muslim militias allied to the government but the militias so far have not participated in the operation.

Iraqi forces have advanced swiftly through the Shirqat area since Prime Minister Haider al-Abadi announced the operation on Tuesday morning.

The town's proximity to Iraqi supply lines reaching Qayyara airbase further north, which will be used as a logistics hub for the push on Mosul, lends it strategic importance. A rocket attack on Tuesday that came within hundreds of meters of U.S. forces at the base is being tested for chemical agents.

Remaining Islamic State fighters in Shirqat are resisting in groups of three and four from inside houses, according to the Iraqi operations command source, who said three army personnel had been killed in recent hours.

Tens of thousands of civilians were thought to be trapped in the area, which has been under Islamic State control since the group seized a third of Iraqi territory in 2014. But the operation has not generated the large-scale displacement seen in other recent campaigns.

A spokesman for the United Nations refugee agency UNHCR said there had been no displacement on Tuesday and only 32 people dislodged from their homes on Wednesday.

Iraqi authorities hope the course of the battle will allow most residents to shelter in place to avoid creating a humanitarian crisis as forces move toward Mosul, where more than a million people are still living.

U.S. and Iraqi officials have said the push on Mosul could begin in October, though there are concerns that not enough planning has been done for how to manage the city, Iraq's second-largest, if and when Islamic State is expelled.

Hawija, east of Shirqat, is the other remaining Islamic State bastion south of Mosul.

The group also controls the city of Tel Afar, west of Mosul towards the Syrian border.

(Writing by Stephen Kalin; editing by Ralph Boulton)