ERBIL, Iraq (Reuters) - Iraqi forces made slow progress against Islamic State in the north of the country on Friday in the second day of an offensive touted as the beginning of a broader campaign to clear areas around the city of Mosul.

Backed by Kurdish forces and a U.S.-led coalition, Iraqi forces launched the assault at dawn on Thursday, recapturing three villages in the Makhmour area south of Mosul, according to peshmerga commander Najat Ali and an Iraqi army source.

The Iraqi army source, who is taking part in the offensive, said troops were preparing to attack another village on Friday but were being held up because the militants had rigged streets and buildings with explosives.

“The mining has slightly slowed down the army,” said the source, who asked to remain anonymous because he is not authorized to speak to the media.

Both Najat Ali, the peshmerga commander, and the Iraqi army source said the militants had used suicide car bombs.

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Thousands of Iraqi troops have deployed to the north in recent weeks, setting up base alongside the Kurdish peshmerga and U.S. forces in Makhmour, which is set to be a key launchpad for any future offensive on Mosul, around 60 km north.

The Iraqi military said on Thursday the advance was the first move in an operation dubbed “Fatah”, or “Conquest”, that aims to liberate the whole of Nineveh province, of which Mosul is capital.

Iraqi officials say they will retake Mosul this year but, in private, many question whether the army, which partially collapsed when Islamic State overran a third of the country in June 2014, will be ready in time.

The city is by far the largest population center controlled by the jihadists, and has already been cut off on three sides by the peshmerga, who are less than 15 km (9 miles) from its northern outskirts at some points along the front line.

The initial target is to retake the villages east of the river Tigris and then the oil town of Qayara on its western bank -- an Islamic State hub linking Mosul with territory the militant group controls further east around Hawija.