Daesh militants driven from nearby Tal Afar regrouped in the northern town of Ayadiya, which Iraqi forces are now assaulting. Iraq's PM declared Ayadiya and Tal Afar liberated from the insurgency.
Iraq's Prime Minister Haider al Abadi says his US-backed forces have taken northern Nineveh province back from Daesh, including the town of Tal Afar.
But pockets of resistance remain in nearby Ayadiya, where militants fled after they were driven from Tal Afar.
Iraqi forces have surrounded several hundred hardcore Daesh members and ordered them to surrender or die.
TRT World's Nicole Johnston has this report from the front line.
Pockets of resistance
Iraqi army divisions and federal police, backed by units from Iran-backed Shia paramilitaries, retook much of Ayadiya on Thursday.
But pockets of resistance remain and Iraqi forces are battling in closed quarters to drive the remaining militants from the town.
"We have to make sure that no more terrorists remain hiding inside the town's houses," Army Lieutenant Colonel Salah Kareem said.
Iraqi forces will intensify their operations on Friday, to dislodge the militants still entrenched inside scattered houses, army officers said.
Iraqis liberating Iraqis
Many of the less than a thousand Daesh now thought to be in Ayadiya came from Tal Afar, where up to 2,000 battle-hardened militants were believed to be defending the town against some 50,000 government troops last week.
US Army Lieutenant General Stephen Townsend congratulated the Iraqi forces on achieving a "stunningly swift and decisive" victory in Tal Afar.
"This is Iraq liberating Iraqis," he said from Baghdad.
Townsend added however, that a quick victory in Tal Afar did not necessarily mean the fight to retake Daesh's remaining territory would be easy.
"While I would like to say that we would see this elsewhere in Iraq and Syria, we are not really planning for that," Townsend said.
"We pledge to you, our people, that we will continue to liberate every inch of Iraq," Abadi said in his statement.
Civilians flee conflict zone
In recent months, tens of thousands of people have fled Tal Afar, which had a pre-war population of about 200,000. The United Nations estimates that 20,000 people fled the city and its surrounding areas between August 14 and 22.
Civilians who fled Tal Afar in recent weeks said they had faced months of starvation and brutal treatment by Daesh, who threatened them with death if they tried to escape.
Army's targeting Hawija next
The recent defeat of Daesh in Mosul, Nineveh's provincial capital, marked the latest in a string of territorial losses for the group.
However, the militants still control areas on both sides of the Syrian-Iraqi border.
This includes Hawija, a city between Mosul and Baghdad that Iraqi officials have said will be the coalition's next target.
The Iraqi army dropped millions of leaflets over Hawija on Thursday, warning residents it was preparing an offensive to recapture the city from Daesh, the military said in a statement.
The leaflets urged residents to stay away from militants' headquarters, to drop weapons and turn themselves in to avoid being killed.