QAYYARA, Iraq (Reuters) - It gets darker earlier these days in the northern Iraqi town of Qayyara, which Islamic State militants abandoned about a week ago after setting fire to many of the region’s oil wells.

Smoke billowing into the sky during a Reuters visit on Monday blotted out the sun in central districts hours before nightfall, producing an apocalyptic scene in this desert settlement which lacks electricity amid 49 degree Celsius (120°F) temperatures.

The Iraqi military’s recapture of Qayyara, along with a nearby airbase in July, is the latest and most significant advance in a U.S.-backed push to Mosul, the largest city under Islamic State control anywhere in its self-proclaimed caliphate.

Baghdad wants to retake Mosul before the end of the year, which it says will effectively end the militants’ presence in Iraq more than two years after they seized a third of its territory. Some officials from countries in the U.S.-led coalition supporting the Iraqi forces have said that timeline may be too ambitious.

Yet the loss of Qayyara certainly dealt a blow to Islamic State, which had extracted oil from some 60 wells and sold it to help finance its activities.

Islamic State used to ship at least 50 tanker truckloads a day from Qayyara and nearby Najma oilfields to neighboring Syria. A sign remains on the main road announcing prices of crude in places like the Syrian city of Aleppo, 550 km (340 miles) west of Qayyara.

Rudimentary refineries once used to refine oil for local consumption have been abandoned on the side of the road leading east out of the town.

The smell of petrol now overwhelms the area, wind carrying the smoke from well fires into the town center. More than a few minutes in the area leaves one’s throat burning, and children walking the streets have quickly developed coughs.

Abdel Aziz Saleh, a 25-year-old Qayyara resident, said he wants Baghdad to put out the fires as soon as possible.

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“They are suffocating us,” he said. “The birds, the animals are black, the people are black. Gas rains down on us at night. Now the gas has reached the residential areas.”

He and other residents said oil had spilled into the nearby Tigris River - assertions denied by the oil ministry, which said the oil spills had been contained by trenches. While several bodies were seen floating in the river on Monday, Reuters could not confirm it had been contaminated with oil.

Iraq says it has put out fires at four oil wells in the Qayyara region, but Reuters could not locate any such efforts at the wells closest to residential areas.

Around a dozen separate plumes of smoke were still distinguishable across the horizon as night fell, when a convoy of firetrucks approached the town.

It was not immediately clear how long it will take to extinguish the flames. When Iraq’s military torched hundreds of Kuwaiti oil wells in 1991 ahead of advancing U.S.-led forces, most fires burned for around two months but some wells were not capped for almost a year.

The oil ministry said it does not expect to resume production from the Qayyara region before Mosul’s recapture. The two main fields, Qayyara and Najma, used to produce 30,000 barrels per day of heavy crude before the takeover by Islamic State.

PEOPLE IN THE STREETS

Despite the well fires, Qayyara remains full of inhabitants. Whereas civilians in most other areas recaptured from Islamic State fled ahead of or during government offensives the majority of Qayyara’s roughly 20,000 residents have stayed put.

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A counter-terrorism officer said that was partly due to the speed with which the army recaptured Qayyara, surprising the Islamic State fighters before they were able to dig in. Qayyara is also located near a military airfield, so many residents in the area have relatives in the army.

With no power and no more fear of punishment from Islamic State’s harsh rule, much of the population was in the streets on Monday, waving to military vehicles that handed out basic supplies like cooking oil, sugar and canned food.

Children flashed peace signs and some played in the black reflective pools of oil that spilled into main streets after Islamic State blew up pipelines and wells next to a main hospital in a likely attempt to obstruct visibility for coalition air strikes.

Commanders are confident electricity can be restored soon in Qayyara and said booby trapped streets and buildings are less of a concern than they were in the western cities of Ramadi and Falluja.

“We surrounded them quickly, so they didn’t have time to lay many IEDs (improvised explosive devices),” said the officer from the elite counter-terrorism service (CTS), which spearheaded the Qayyara operation along with the army’s 9th armored division.

“There were a lot on the main street they thought we would use to enter but instead we came in from the desert.”

The militants still managed to put up a fight, he said, quickly mustering five vehicle-borne IEDs to attack the forces.

The approach to the city shows signs of the fighting that followed, with many buildings collapsed by aerial bombardment. The U.S.-led coalition said it had launched more than 500 air strikes in support of Iraqi forces, nearly as many as in last year’s battle for the much larger city of Ramadi.

Qayyara and its nearby airbase - where the bulk of a 560-strong U.S. troop reinforcement will be based - will form the main staging base for the anticipated offensive on Mosul, 60 km (35 miles) to the north.

Many neighborhoods in Qayyara appear mostly or completely intact, and civilians, many of whom appeared to have recently shaved the beards that Islamic State requires men to grow, said they feel safe in their homes.

After showing off the body of an Islamic State fighter crushed when the building he was in was hit by an air strike, two men from Qayyara alerted soldiers to a possible suicide bomber hiding in a nearby home, which they proceeded to investigate.

A hundred meters from the decomposing corpse, a well fire burned, spewing smoke and bright flashes into the sky.