Growing speculation that Iraqi troops may be gearing up for attack on city controlled by Islamic State since June

Kurdish fighters backed by coalition air strikes have seized large swaths of territory from Islamic State fighters in northern Iraq, including a road used by Isis to supply the key city of Mosul.

In a major offensive launched on Wednesday, the peshmerga have fought their way to within 12 miles of the city centre and cut off a road that connects Mosul to Tal Afar and Sinjar.

In recent days the Kurds have retaken a 185 sq mile area of Sinjar province, west of Mosul, putting Isis on the back foot and tightening the noose around the city.

There is growing speculation that Iraqi government troops may be gearing up for an attack on Mosul, which jihadist fighters have occupied since June when they advanced rapidly across Iraq’s north.

Until this week, Islamist militants were able to transfer goods, petrol and military equipment from eastern Syria into Mosul, Iraq’s second city and the biggest urban centre under their control. The Kurds have now shut off the city from three sides. They also now control several key villages and intersections.

“I don’t think anyone would envy the situation the people of Mosul are in,” Masrour Barzani, the head of Kurdistan’s regional security council, said on Wednesday. “The terror of Isis is too much for anyone to handle.”

Barzani predicted that Mosul would soon be “liberated”, and he said recent Kurdish advances had significantly reduced Isis’s freedom of movement.

On Thursday residents said conditions in Mosul had dramatically worsened. Once known as a cradle of multiculturalism in Iraq, Mosul has turned into a city where executions and stonings are carried out on a regular basis and residents are deprived of basic rights and services.

A fighter holds up an Isis flag on a street in Mosul in June 2014. Photograph: Reuters

Few people dare talk to the media, and those who do speak only on condition of anonymity, fearing reprisals against themselves and their families. Only a trickle of information comes out of Mosul besides Isis’s own slick propaganda.

Civilians inside the city – from taxi drivers to housewives, students to shopkeepers – paint a gloomy picture of life there. “All I can say is that life under Daesh [Isis] is hell, not heaven as they claim,” said Tariq, who used to study at a technical institute before Isis took over. “We can’t study and we don’t know what the future holds for us.”

A shopkeeper near Nabi Yunus mosque, which was destroyed by Isis last July, said he was weary of life under Isis but saw no way out. “If you want to leave Mosul you need three people to guarantee that you will come back after five days. If you don’t return, you put their lives at risk.”

The shopkeeper said many militants killed or injured fighting in Sinjar had been brought back to Mosul. “I have been forced to give blood three times,” he added.

With American and Iraqi planes targeting fuel tankers on the road into Isis-controlled areas, and Kurdish authorities cracking down on oil smuggling to and from their region, fuel is in short supply. The price is so high that some residents have resorted to cutting down trees and burning the wood to cook and keep warm.

The cost of cooking oil is double elsewhere in Iraq, spurring residents to revive long outdated methods of cooking, joining together in groups of three or four to buy wood-burning mud ovens to bake bread. Electricity and gas are scarce and rubbish seldom collected.

Air strikes targeting Isis militants north of Mosul. Photograph: Anadolu/Getty Images

Where there are no alternatives, residents have no choice but to accept higher prices. Muhanad, a 29-year-old taxi driver, said he often queued up for five or six hours to receive 20 litres of petrol, also costing twice as much as in the rest of Iraq. “The queue stretches through the streets for three to five kilometres,” said Muhanad, who has to make a living for his wife and four children.

He said Isis had introduced price caps and he could charge Isis fighters and imams only a fraction of the cost of a journey. “In my taxi I can only listen to Zohor radio which broadcasts Daesh statements, the latest of which stated that able men had to enlist for jihad against the coalition,” he said.

While the uncompromising interpretation of Islam imposed by Isis targets everyone in the city and other areas under the group’s control, the restrictions on women are particularly suffocating and many are too scared to leave their homes.

“They have withheld all freedoms from us,” said a 37-year-old woman who asked to be referred to as Umm Omar. “When we go out, if our clothes are not appropriate we are taken to Omar Abdul Aziz mosque to repent.”

Families fear that their daughters will be forcibly wed to Isis fighters, and so send elderly women to do the shopping for them.

Tariq, the student, said life for young people had become particularly oppressive. They were not allowed to listen to music and if anyone was found to be in a romantic relationship outside marriage, they were stoned to death supervised by an Isis emir named Abu Zahra.

Around 10 days ago a woman was stoned to death for having extramarital affair and Isis executed two men for “homosexual acts” by throwing them off the roof of a building. A resident of Mosul who now lives outside the city identified the building as belonging to a state-run national insurance company in central Mosul. Isis posted photos of these executions, together with images of two thieves who were publicly shot.

Unlike most people the Guardian spoke to, who asked that their identity be protected, Tariq said he did not fear the consequences if his name was published. “Death is better than this life,” he said.

Additional reporting by Shalaw Mohammed in Kirkuk.