Canadian special forces have clashed with the Islamic State of Iraq and the Levant group by exchanging gunfire in Iraq in recent days, in the first confirmed ground battle between western troops and ISIL, a senior officer has said.

The Canadians came under mortar and machine gun fire while training Iraqi troops near the front lines and shot back in what Canadian special forces commander, Brigadier General Michael Rouleau, described as self-defence, killing the ISIL fighters.

Rouleau said the melee had taken place in the previous seven days and was "the first time we've taken fire and returned fire" in Iraq, where the armed group has overrun large areas.

"My troops had completed a planning session with senior Iraqi leaders several kilometres behind the front lines," Rouleau told a regular media briefing on the conflict.

"When they moved forward to confirm the planning at the front lines in order to visualise what they had discussed over a map, they came under immediate and effective mortar and machine gun fire."

The general said the Canadians used sniper fire to "neutralise both threats" and there were no Canadian injuries.

The United States has previously reported having launched an unsuccessful hostage rescue operation against ISIL in neighbouring Syria, but western forces have not officially engaged in ground combat.

A US-led international coalition has been carrying out air raids on ISIL fighters in Iraq and Syria since last year. Canada is only involved in Iraq operations.

Canada sent some 600 air crew and other military personnel - as well as six fighter jets and other military aircraft - to the region in November to participate in the air strikes against ISIL.

The Canadian deployment is due to end in April, unless parliament votes to extend the mission.

'Behind front lines'

There are also 69 Canadian special forces training and advising Iraqi troops on the ground, but theoretically not in combat.

Most of the instruction, a key plank of western moves to defeat the emboldened ISIL, takes place "well behind front lines", Rouleau noted.

ISIL gained international notoriety last August when its fighters and those from other militant groups swept through the northern Iraqi city of Mosul, then overran swaths of territory north and west of Baghdad, threatening to overrun the capital.

Western governments fear ISIL could eventually strike overseas, but their biggest immediate worry was its gains in Iraq and Syria, and the likely eventual return home of foreign fighters.

US President Barack Obama has outlined plans for the broad international coalition to "significantly degrade" the group in Iraq and Syria.

The coalition air strikes in Iraq and Syria have targeted ISIL fighting positions, heavy weapons and buildings used to store weapons.

US General Jonathan Vance said that ISIL "has been stopped [in Iraq] and they are unable to mount broad offensive operations that would somehow change the situation dramatically."

But, he added, "a large-scale reversal of ISIL's position in Iraq has yet to come".