Insurgents gained more ground in Iraq overnight, moving into two towns in the eastern province of Diyala after security forces abandoned their posts.

Security sources said the towns of Saadiyah and Jalawla had fallen to the insurgents, as well as several other villages around the Himreen mountains, which have long been a hideout for militants.

Kurdish peshmerga forces deployed more men to secure their political party offices in Jalawla before the insurgents arrived in the town. There were no confrontations between them.

The Iraqi army fired artillery at Saadiya and Jalawla from the nearby town of Muqdadiya, sending dozens of families fleeing towards Khaniqin near the Iranian border, security sources said.

Militants from the Islamic State in Iraq and the Levant (ISIL) overran the northern city of Mosul earlier this week and have since pressed south towards Baghdad in an onslaught against the Shi'ite-led government.

U.S. President Barack Obama threatened U.S. military strikes against the Sunni Islamist militants who want to establish their own state in Iraq and Syria.

The Kurds, who run their own autonomous region in the north, have taken advantage of the chaos to expand their territory, taking control of the oil-rich of Kirkuk and other areas outside the formal boundary of their enclave.- Reuters