Hundreds of Iraqi soldiers and pro-government fighters are gathering for an assault on the strategic jihadist-held northern town of Baiji, officers said on Wednesday.

"Iraqi forces are massing at the town of Baiji, preparing to enter the town and regain control of it," said Lieutenant General Abdulwahab al-Saadi, who heads the provincial military command.

Baiji, which was overrun during a sweeping offensive spearheaded by the Islamic State group in June, has been out of government control for months.

It lies on the main highway to IS-controlled second city Mosul and its recapture would help to further isolate jihadist forces in the city of Tikrit, further south.

The assault could also open the way to breaking a months-old jihadist siege of government forces defending Iraq's largest oil refinery, which is located near Baiji.

But even with U.S.-led air support, government forces face a major challenge in retaking the town, and previous offensives have failed to gain ground.

An army brigadier general said that the government forces, which are now about 1.5 kilometers (one mile) from Baiji, are made up of soldiers, militiamen and armed tribesmen.

But special forces will lead the push into the city, which the officer said has been used as a center for moving supplies brought in from Syria to other parts of Iraq.

IS holds territory on both sides of the Iraq-Syria border, and has declared an Islamic "caliphate" encompassing parts of both countries.