BAGHDAD (Reuters) - Air strikes killed dozens of people, including many women and children, in an Islamic State-held town near Iraq's western border with Syria on Wednesday, two parliamentarians and local hospital sources said.

They said the air strikes hit a busy market in the town of Qaim, in Iraq's Anbar province, describing the incident as a massacre. The hospital sources said 55 civilians were killed, including 12 women and 19 children, in three air strikes.

The bodies of eight militants were delivered to Qaim hospital morgue, the hospital sources said.

Anbar lawmaker Ahmed al-Salmani also said 55 civilians were killed. Another lawmaker, Mohammed Karbouli, told Reuters that 60 people had been killed, including some of his relatives.

An official in Anbar, who asked not to be identified, said he could not go into detail while the incident was being investigated, but said that it could not be justified. "Killing dozens of civilians only to target a handful of terrorists is clearly a massacre against innocent civilians," he said.

Karbouli said it raised questions about the accuracy of intelligence used to target Islamic State fighters, and Salmani said Prime Minister Haider al-Abadi must act.

"(I) demand him to stop the bombing and hold accountable the perpetrators of this massacre," he said.

Officials in Baghdad did not immediately comment on the reports, but Islamic State's news agency Amaq released footage showing what it said was the aftermath of the strikes it blamed on Iraq's air force.

It showed burning vehicles on a wide main road lined by shops. Corpses, some charred and others bloodied, could be seen on the street, and the bodies of several children were also shown. Several buildings had been wrecked.

The attack took place as Iraqi forces are waging a seven- week campaign to crush Islamic State in the city of Mosul, about 280 km (175 miles) northeast of Qaim.

The army's elite counter terrorism units have advanced into eastern Mosul, but have met fierce resistance from Islamic State fighters dug in across the city.

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The militants, who have controlled Mosul since they took it over in mid-2014, have hit the advancing soldiers with suicide car bombs, mortar barrages, sniper attacks and ambushes launched through a network of tunnels under residential areas.

Defeat for the militants in northern Iraq's largest city would mark a major setback for Islamic State's self-declared caliphate in Iraq and Syria, but the militants still control territory in western Iraq near the Syrian border.

(Reporting by Ahmed Rasheed; Editing by Tom Heneghan)