The Islamic State of Iraq and the Levant (ISIL, also known as ISIS) group seized control of two villages west of Kirkuk following the retreat of Kurdish Peshmerga fighters from the area.

The villages of Taweeli'ah and al-Maliha, in northwestern Dibis province, were under complete control by ISIL on Tuesday, an Al Jazeera correspondent based in Erbil quoted security sources as saying.

ISIL infiltrated the villages from the desert of the Anbar and Salahuddin provinces, taking advantage of the security vacuum left by the Peshmerga's retreat.

Kurdish forces seized control of disputed areas in the provinces of Kirkuk, Nineveh, Diyala and Salahuddin when ISIL swept through northern Iraq in 2014 after the army collapsed.

ISIL's gains came as the Iraqi military continued its major operation to retake the oil-rich province of Kirkuk amid an escalating dispute in the wake of a controversial September 25 referendum on Kurdish secession that Baghdad declared illegal.

On Monday, Iraqi forces easily took control of Kirkuk city after Kurdish fighters withdrew.

Kurdish forces had previously vowed to defend Kirkuk, and for three days they were locked in an armed standoff with Iraqi government troops and allied Iranian-backed paramilitaries known as the Popular Mobilisation Forces (PMF) on the outskirts of the city.

The two main oil fields and facilities in Kirkuk province were now under the control of Iraq's Oil Ministry, a ministry spokesman said on Tuesday. "The ministry now holds also oil wells and facilities in Kirkuk," Asim Cihad told Anadolu news agency.

{articleGUID}

Peshmerga forces on Tuesday also began to withdraw from Makhmur district southeast of Mosul in northern Iraq, according to a Kurdish military officer.

"Kurdish forces are moving their heavy equipment toward Erbil," Captain Taher Saadullah al-Duski told Anadolu.

He said Iraqi government forces had not yet entered the district. Al-Duski did not give a reason for the Kurdish pullout from the area.

Kurdish military officer Sirwan Khalil also said Peshmerga forces pulled out from the village of Kanhash in the historic city of Nimrud, southeast of Mosul.

Signs of division have surfaced among the Iraqi Kurds' two dominant factions, the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK).

Iraqi forces also said on Tuesday they seized the Yazidi Kurdish town of Sinjar from the Peshmerga.

"The Iraqi army and Popular Mobilisation Forces entered the town of Sinjar after the Peshmerga withdrew without a fight," said the Hashed al-Shaabi, a paramilitary force made up largely of Iran-trained Shia militias.

The northwestern town is infamous as the site of one of ISIL's worst atrocities when it killed thousands of Yazidi men and abducted thousands of women and girls as sex slaves in 2014.

Peshmerga forces pulled out of the area of Khanaqin, on the border with Iran, as Iraqi forces prepared to take over their positions, security sources told Reuters news agency.