As the first clashes settle into a grind on day two, refugees speak of a desperate Isis dug in deep inside the stronghold

Their relief was palpable. Old men who had walked through the desert, families who arrived in clapped-out cars, and black-veiled women and girls: all were coming straight from the clutches of Islamic State (Isis).

The war’s most recent refugees queued on Tuesday at a checkpoint in the town of Khnash, around 14 miles from Mosul, where they spoke of the terror and confusion they had run from only hours before.

“It’s not good at all,” said a man from the nearby town of Adla, as he walked his elderly mother down a dusty hillside. He spoke of a counteroffensive staged there by the terrorist group. “The Iraqi army arrived yesterday and took the town, and today Isis came back and the army ran away. We weren’t expecting this.”

On its second day, the battle to retake Mosul from Isis, which has been described as the battle that will either reunite Iraq or divide it for good, settled into a grind. The opening clashes on Monday had seen around 23 villages and hamlets taken by both Iraqi and Kurdish forces, with both sides claiming that their early gains had exceeded expectations.

Facebook Twitter Pinterest A girl arrives at the Peshmerga frontline. Photograph: Cengiz Yar for the Guardian

Peshmerga forces succeeded in clearing villages to the north-east and east of the city, and say they are in the process of handing over liberated areas to Iraqi troops who alone will advance further into Mosul itself. But as the push towards the last urban stronghold of Isis in Iraq continues, the cooperation necessary to get them there is already starting to fray.

Fighting for every yard: on the ground with Kurdish troops pushing into Mosul Read more

At the checkpoint on Tuesday, as Peshmerga officers organised the new refugees into groups and handed out water, an Iraqi Humvee roared down the road towards them, barrelling through the checkpoint and covering both refugees and troops in coarse grey dust.

“He could have been a suicide bomber,” said one Kurdish officer as he brushed himself down. “They are pigs,” said another. “They know nothing about respect.”

As an Iraqi army tanker towed along a broken-down truck, the Kurds stood by. Soldiers briefly disgorged and milled around, neither side speaking much to the other. “It’s shameful what they are doing with all their flags,” said a Kurdish officer who had stepped away from his counterparts. “They are all over their tanks and artillery.”

Facebook Twitter Pinterest More civilians arrive. Photograph: Cengiz Yar for the Guardian

Over a crest behind the group, Iraqi army artillery pieces were dug into the soil, several festooned with flags depicting revered Shia imams. The images had been contentious in the lead up to the war, but are even more so now that the battle has begun. “They are aiming for a sectarian conquest,” said the Peshmerga officer. “This is not a war of liberation.”

Amid the tension, the newcomers spoke of how the offensive had thrown their homes into fresh turmoil. All had fled towns on the outskirts of Mosul and none had escaped the city itself. “It’s terrible at home,” said Abu Layla, who had come from a village 10km from the city. “They [Isis] are panicking and getting more nasty than ever.”

Abu Layla’s two wives and four daughters were all wearing niqabs which covered their faces, except for eye slits. They settled into a makeshift car park among around 200 men, women and children, some wearing more conventional head scarves of vivid pinks, yellows and blues that the dust could not obscure.

Facebook Twitter Pinterest A man who escaped from Mosul inside a Kurdish security screening area at the Dibaga camp. Photograph: Cengiz Yar for the Guardian

Aid agencies believe a mass exodus of around 1.3 million from the city and its surroundings could take place as soon as forces enter Mosul, held by Isis since June 2014. The flow from the outskirts so far has been manageable, with less than 1,000 people crossing into Iraqi- or Kurdish-controlled areas on Tuesday.

Battle for Mosul: Iraqi forces converge in decisive battle against Isis Read more

“This is going to take a long time,” said another man. Referring to the river Tigris, which splits Mosul roughly in two, he added: “These guys are mostly Iraqis and they will not give up. People on this side of the river can not run away to Anbar. They have to fight.”

Up the road to Irbil, in a refugee camp where most of the new arrivals will be sent, recent arrivals from Mosul agreed. “The east bank of the river will be the most difficult to take,” said one man, a former member of Iraq’s intelligence services, who would not give his name.

“Those from the west bank who want to stay and fight have moved to the east. They have dug tunnels, laid mines. They have put blast walls across the most narrow of streets.

“But despite all that, their situation is terrible. There are sleeper cells ready to rise up against them. I was part of those cells. I spent the past two years sleeping in friends’ houses and on farms. They killed my father and they want to kill me. I had to leave two weeks ago. They were going to houses looking for me.”

Facebook Twitter Pinterest Peshmerga forces take part in an operation to the south-east of Mosul. Photograph: Ahmed Jalil/EPA

Most of the other men in a screening area of the Dibaga camp had also fled Mosul in recent weeks. Only a small number had escaped the city in the days before the fighting, and virtually no one had made it to safety in the 48 hours since.

As the flow of those fleeing Mosul intensifies, Isis members are widely expected to try to hide among refugees. Camp officials in Dibaga say they are aware of the issue. “We get them a lot,” said one such official. “They get all this way and they get off the truck and put their hands up and say, ‘I was in Isis.’ One of them said to me that he doesn’t care if we jail him for life. Just so long as he is safe. The Iraqi military would have killed him.”

Asked about the possibility of Isis members fleeing north or east, Abu Juud, 23, who escaped Mosul earlier this month, said: “We know who the families are, we know where they are from, who is good and who isn’t. It is impossible for them to flee with small groups and very difficult in large groups. They will be caught.”

Additional reporting by Salem Rizk