Iraqi forces have opened a second front in preparation for an assault on the Islamic State stronghold of Mosul, a day after government troops declared victory over the militants in Fallujah.

Elite counter-terrorism forces and two army divisions, backed by US-led coalition air strikes, advanced from a northern refinery town towards an airfield seen as key for a move to retake Mosul, security officials said.

Mosul is Iraq's largest northern city and Islamic State's de facto capital in the country.

Government troops cleared two villages and pressed around 20 kilometres along a desert route west of Baiji, the first advance past the town since its recapture in October, the security officials said.

Defence Minister Khaled al-Obaidi said the assault marked the launch of operations to push Islamic State out of Qayara, about 115 km north of Baiji, where an airfield could serve as the staging ground for a future offensive on Mosul, a further 60 km north.

Army troops on a separate front pushing west from Makhmour for the past three months have made only halting progress on the opposite side of the Tigris river.

"The launch of operations to liberate Qayara will not give the terrorists a chance to catch their breath," Mr Obaidi said on Twitter alongside a picture of Humvee military trucks snaking down a desert road.

Iraqi forces entered the centre of Fallujah, an hour's drive west of Baghdad, on Friday morning after a four-week operation that sent its tens of thousands of residents fleeing to overwhelmed displacement camps nearby.

Doubts Iraqi forces are ready to retake Mosul

Militants tried to slow the troops' advance north of Baiji with mortar attacks that killed two policemen and wounded three soldiers, said army Col. Mohammed Abdulla from Salahuddin operations command.

Two suicide car bombs were taken out by air strikes before reaching their targets, though dusty weather was making it difficult to target militants and slowing the advance, military sources said.

Senior officers in the counter-terrorism service said the forces would not enter Islamic State strongholds in the area to avoid getting tied down in secondary battles.

The desert route also leads the troops further away from the Makhoul mountains east of Baiji, from which Islamic State has been launching mortars in and around the town for months.

Prime Minister Abadi said Iraqi forces will retake Mosul this year but, in private, many question whether the army, which partially collapsed when Islamic State overran a third of the country in June 2014, will be ready in time.

Retaking Qayara and a nearby refinery with a production capacity of 16,000 barrels per day could also pinch Islamic State's finances.

Reuters