MOSUL, Iraq (Reuters) - The U.S. military said on Saturday a U.S.-led coalition strike had hit an Islamic State-held area of Iraq’s Mosul where residents and officials say as many as 200 civilians may have been killed as result of an air raid.

The American confirmation followed a decision by Iraqi government forces to pause their drive to recapture west Mosul on Saturday because of the high rate of civilian casualties, a security forces spokesman said, a move apparently motivated by the incident.

With fighting intensifying to recapture Mosul, around half a million civilians remain in Islamic State-held areas in the west of the city, complicating use of air strikes and heavy artillery to drive the hardline militants from their last major stronghold in Iraq.

Iraqi forces are pushing into Mosul’s Old City, where fleeing residents say militants are hiding among the civilian population, sheltering in family homes and using the narrow alleyways and streets to their advantage.

What happened in the incident on March 17 in Mosul al-Jadida district is still unclear. Some residents say a coalition air strike hit an explosive-filled truck, detonating a blast that collapsed buildings packed with families.

U.S. military officials say they are investigating, but initial reports from residents and Iraqi officials in the past week said dozens of people had been killed after air strikes by U.S.-led coalition forces.

Mosul municipality chief, Abdul Sattar al-Habbo, who is supervising the rescue, said 240 bodies had been pulled from the rubble of collapsed buildings. Previous estimates from local officials had said around 130 people had died.

The United Nations also expressed its profound concern, saying it was “stunned by this terrible loss of life”.

U.S. Central Command, which oversees U.S. military Middle East operations, said on Saturday that a review determined that U.S.-led coalition operation, requested by the Iraqi government, had struck Islamic State fighters and equipment “at the location corresponding to allegations of civilian casualties”.

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It was investigating to determine the facts and the validity of reports of civilian casualties, it said. It did not specify which coalition nation carried out the strike.

The exact cause of the collapses was not clear but a local lawmaker and two residents said on Thursday the air strikes may have detonated an IS truck filled with explosives, destroying buildings in the heavily-populated area.

The speaker of the Iraqi parliament, Salim al-Jabouri, said in a statement: “What’s happening in the west part of Mosul is extremely serious and could not be tolerated under any circumstances.”

Up to 600,000 civilians are still believed to remain in IS-held areas of Mosul, a challenge to the government offensive tactically but also politically as the Shi’ite Muslim-led government seeks to avoid alienating people in the mainly Sunni city.

NEW TACTICS

Residents escaping besieged western Mosul have told of Iraqi and U.S.-led coalition air strikes demolishing buildings and killing civilians in several cases.

The insurgents have also used civilians as human shields and opened fire on them as they try to escape Islamic State-held neighborhoods, fleeing residents said.

“The recent high death toll among civilians inside the Old City forced us to halt operations to review our plans,” a Federal Police spokesman said on Saturday. “It’s a time for weighing new offensive plans and tactics. No combat operations are to go on.”

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The offensive to drive Islamic State out of Mosul, now in its sixth month, has recaptured the entire eastern side of Mosul and about half of the west.

But advances have stuttered in the last two weeks as fighting enters the alleys of the Old City, home to the al-Nuri mosque where Islamic State leader Abu Bakr al-Baghdadi declared a caliphate spanning large areas of Iraq and Syria in 2014.

“We need to make sure that taking out Daesh (Islamic State) from the Old City will not cost unwanted high casualties among civilians. We need surgical accurate operations to target terrorists without causing collateral damage among residents,” the Federal Police spokesman said.

A U.S. deputy commanding general for the coalition told Reuters on Friday that the solution could lie in a change of tactics. The Iraqi military is assessing opening up another front and isolating the Old City, U.S. Army Brigadier General John Richardson said.

Fleeing residents have described grim living conditions inside IS-held parts of Mosul, saying there was no running water or electricity and no food coming in.

But families are streaming out of the northern city, Iraq’s second largest, in their thousands each day, headed for cold, crowded camps or to stay with relatives. Hunger and fighting are making life unbearable inside.

The Iraqi Observatory for Human Rights said that since the campaign on western Mosul began on Feb. 19, unconfirmed reports said nearly 700 civilians had been killed by government and coalition air strikes or Islamic State actions.

The militants have used car bombs, snipers and mortar fire to counter the offensive. They have also stationed themselves in homes belonging to Mosul residents to fire at Iraqi troops, often drawing air or artillery strikes that have killed civilians.

The United Nations chief humanitarian official, Lise Grande, said civilians were at extreme risk as the fighting intensified and all sides must to do their utmost to avoid such casualties.

“International humanitarian law is clear. Parties to the conflict — all parties – are obliged to do everything possible to protect civilians. This means that combatants cannot use people as human shields and cannot imperil lives through indiscriminate use of fire-power,” she said in a statement.