Australian soldiers have been caught up in an Islamic State group chemical attack in Mosul but were not harmed, officials say.

Key points: Pentagon aware of "low grade" chemical attack on Iraqi unit in west Mosul

Pentagon aware of "low grade" chemical attack on Iraqi unit in west Mosul Australian and US advisers were with the unit at the time, showed no medical signs of exposure

Australian and US advisers were with the unit at the time, showed no medical signs of exposure Islamic State's gas attacks labelled as "rudimentary" and desperate

The Pentagon said it was aware of what it said was a "low grade" chemical attack on an Iraqi unit in west Mosul, which has been the scene of heavy fighting as Iraqi forces and their allies battle Islamic State militants for possession of the city.

A Defence official has told the ABC Australian and US advisers were with the unit at the time.

Australian medics provided first aid to Iraqi counter-terrorism soldiers after the attack, the Department of Defence says.

"No Australian personnel were exposed during the gas attack on Iraqi Counter-Terrorism Service soldiers in Mosul," the spokesperson said.

"The failed gas attack highlights Daesh's [Islamic State's] desperation as Iraqi ground forces continue operations to liberate Mosul."

It is not known what chemical weapon was used, but IS is believed to have access to chlorine and mustard gas.

"My advice right at the moment is no Australian troops were affected but Australian forces did provide assistance following the attack. That's my current advice received in last few minutes," Prime Minister Malcolm Turnbull told AM on Wednesday.

In a statement the Pentagon labelled the attack as largely ineffective.

Defence officials say IS's chemical weapons are "rudimentary".

There were reports of two separate IS gas attacks in as many days over the weekend, but it is not clear if the Australian advisers were involved in either of those attacks.

The spokesman for the Joint Operation Command in Iraq said IS attacked government troops with some type of gas in western Mosul, a day after militants launched a gas attack in western Mosul's al-Abar neighbourhood.

The offensive to retake Mosul has seen heavy street-to-street fighting, with Islamic State fighters driven out of the east of the city and making a stand in their last strongholds in the west.

In March Iraqi troops recaptured west Mosul's main government buildings and say they are now in possession of around 30 per cent of west of the northern Iraqi city.

A recent US-led airstrike allegedly killed dozens of civilians in Mosul, but Australia's Defence Minister Marise Payne said Australian combat aircraft were not involved.

After regaining control of eastern Mosul, Iraqi forces are now locked in a battle for the western half of the city. ( Reuters: Marko Djurica )

Mosul is IS's most important stronghold in Iraq and the battle is key to fighting the broader threat of terrorism.

It took three months for Iraqi Government forces to regain control of the eastern half of the city, with thousands killed or injured as troops made their advance through neighbourhoods and IS often using civilians as human shields.

In 2015, the Australian Defence Force boosted protection against chemical weapon attacks for its personnel in Iraq.

Defence Chief Air Marshal Mark Binskin said at the time that IS's use of "limited chemical weapons" — including chlorine and mustard gas — was an emerging threat against Australian forces.

The Iraqi army has built a new bridge over the Tigris river south of Mosul as an escape route for families fleeing the fighting, after recent flooding blocked all crossing points.

Mosul's permanent bridges have largely been destroyed during the campaign to seize back Iraq's second-largest city.