Kurdish forces in northern Iraq say they have recaptured the town of Zumar from Islamic State (IS) fighters, as Iraqi security forces made significant gains against the jihadist group near Baghdad.

Zumar, north-west of Mosul, has been the scene of weeks of fierce fighting between Kurdish peshmerga forces and Islamic State militants.

The Kurds retook the town and several nearby villages on Saturday after heavy coalition air strikes against the insurgents, security sources said.

It was one of the first towns that fell to IS when they over-ran much of northern Iraq last June.

Iraqi troops also seized most of Jurf al Sakhar, south of Baghdad - a victory that would allow Iraqi authorities to prevent the Sunni insurgents from edging closer to the capital and maintaining connections to their strongholds in western Anbar province.

"We have managed to push out Islamic State terrorists from the town of Jurf al Sakhar today and now we are raising the Iraqi flag over the government offices," provincial governor Sadiq Madloul said.

Speaking to state television in the town, prime minister Haider al Abadi said Iraqis forced out by fighting would soon return to their homes.

The Pentagon said the US-led military coalition pounded the Islamic State group on Friday and Saturday, with 22 air strikes in Iraq and one in Syria.

United States Central Command, which is overseeing the air war against the jihadists, said in a statement the bombings mostly targeted IS units, buildings, positions and vehicles near the strategic Mosul dam.

The IS militants briefly held Mosul dam in August, but Kurdish forces and Iraqi army troops - backed up by US air strikes - succeeded in retaking the dam later that month.

The dam is the country's largest and if destroyed or dismantled could unleash major flooding in the city of Mosul and the capital, Baghdad.

A further four strikes hit near Fallujah, while others targeted Bayji, Qurayat al Hajjaj and other locations in Iraq.

The Pentagon said the sole strike in Syria, near Kobane, destroyed an artillery piece.

Kurdish forces, backed by US air power, have been holding out against an IS offensive around Kobane for weeks.

ABC/wires