Two ballistic helmets hang on a trolley in an area controlled by Iraqi forces fighting ISIS in west Mosul. Thomson Reuters ERBIL, Iraq (Reuters) - Iraqi forces are making progress in their offensive to expel Islamic State from Mosul but face a "very complicated" urban battle as the militants hide in mosques, homes and hospitals, a U.S. general told Reuters on Wednesday.

Government forces have retaken much of Iraq's second-largest city since January but have been trying since then to dislodge the Sunni Muslim militants from the densely populated Old City in western Mosul, their last Iraqi stronghold.

"Iraqi security forces continue to progress as they liberate the western side of Mosul," U.S. Army Major General Joseph Martin, head of ground forces for the U.S.-led coalition fighting Islamic State, said by telephone.

He declined to say whether the militants would be defeated rather within weeks or months, saying: "It's hard to tell because the terrain changes literally every day."

Martin said Iraqi forces had surrounded Islamic State positions but it was not always possible to move vehicles into all parts of the Old City with its narrow streets.

"Some days like yesterday (there was) significant amount of progress, other days there is not much progress but progress nevertheless," he said.

An Iraqi federal police member fires his rifle near the body of an ISIS fighter during a battle at Jada district in western Mosul, Iraq, March 29, 2017. REUTERS/Youssef Boudlal

Iraqi officers have said snipers have slowed them down in western Mosul in the biggest ground operation in Iraq since the 2003 U.S.-led invasion that toppled Saddam Hussein.

"It's very complicated," Martin said. "The terrain literally changes from neighborhood to neighborhood ... the nature of the enemy, how the population reacts."

He also said coalition forces continued to provide air support for Iraqi forces despite an explosion that followed an air strike that was believed to have killed scores of civilians on March 17.

The U.S. military has said a U.S.-led coalition strike had hit an Islamic State-held area where residents and officials say as many as 200 civilians may have been killed.

"Nothing has changed in terms of air support. It's been consistent," he said.

Iraqi special forces soldiers walk on a street during a battle with ISIS militants in Mosul, Iraq. Thomson Reuters

He declined to discuss any involvement of the coalition in the explosion but said Islamic State was "very creative in exploiting the human element" by using hospitals, schools, churches, homes and mosques as hideouts or weapons caches.

Many of the dead are transferred to a morgue in Qayyara, about 36 miles south.

On the deadliest day of the battle for west Mosul, 21 bodies arrived. The facility has been so strained by the arrival of bodies that the Iraqi government authorized it to issue death certificates for some bodies; others are sent to a new mortuary in east side of Mosul.

Some 400,000 people are believed to have been trapped in western Mosul with U.N. camps filling up with people fleeing the violence.

Daily suicide attacks and roadside bombs, along with snipers and mortars, have been the most lethal Islamic State tactics in resisting the 100,000-strong Iraqi force.

A Federal Police member flashes a victory sign during a battle with ISIS militants in the Mansour district of Mosul, Iraq, March 12, 2017. REUTERS/Ari Jalal

A morgue worker in east Mosul estimated that 2,000 ISIS fighters had been killed by Iraqi forces in the fight to recapture that half of the city, which took three months between mid-October and late January.

Several thousand more ISIS fighters were thought to remain in west Mosul.

The morgue worker, who was employed there until a little over a month ago, said 72 militants came through in a single day during fighting in east Mosul.

However, during the fighting for west Mosul, relatively few militants had been brought to his facility.

"The number of civilian casualties is greater," he told Reuters.

"It's clear that their (Islamic State) competence, their cohesion and their effectiveness continues to wane over time," Martin said.

But he said the militants would fight to the end and there were no signs they would run out of ammunition anytime soon after preparing for the battle for two and half years.

"Don't underestimate the ammunition," he said. "But the outcome is very, very clear. They are going lose and the Iraqis will win."

(By Ulf Laessing; editing by Alison Williams)