Shi'ite fighters and Iraqi security forces advance towards Falluja, Iraq, May 25, 2016. Reuters

SOUTHERN OUTSKIRTS OF FALLUJA, Iraq (Reuters) - Iraq has delayed its assault on the city of Falluja because of fears for the safety of civilians, Prime Minister Haider al-Abadi said on Wednesday, as his forces halted at the city's edge in the face of ferocious resistance from Islamic State fighters.

Abadi's decision to halt, two days after elite Iraqi troops poured into the city's rural southern outskirts, postpones what was expected to be one of the biggest battles ever fought against Islamic State.

The government, backed by world powers including the United States and Iran, has vowed to win back the first major Iraqi city that fell to the group in 2014.

"It would have been possible to end the battle quickly if protecting civilians wasn't among our priorities," Abadi told military commanders at the operations room near the frontline in footage broadcast on state television. "Thank God, our units are at the outskirts of Falluja and victory is within reach."

Falluja has been a bastion of the Sunni insurgency that fought both the U.S. occupation of Iraq and the Shi'ite-led Baghdad government. Islamic State fighters raised their flag there in 2014 before sweeping through much of Iraq's north and west.

Abadi first announced plans to assault Falluja 10 days ago. But with 50,000 civilians still believed trapped inside the city, the United Nations has warned that militants are holding hundreds of families in the center as human shields.

After heavy resistance from Islamic State fighters, the troops have not moved over the past 48 hours, keeping their positions in Falluja's mainly rural southern suburb of Naimiya, according to a Reuters TV crew reporting from the area.

Explosions from shelling and air strikes as well as heavy gunfire could be heard on Wednesday morning in the city that lies 50 km (30 miles) west of Baghdad.

Falluja is the second-largest Iraqi city still under control of the Sunni militants, after Mosul, their de facto capital in the north that had a pre-war population of about 2 million.

Abadi's initial decision to assault Falluja appears to have gone against the plans of his U.S. allies, who would prefer the government concentrate on Mosul, rather than risk getting bogged down in a potentially drawn out fight for a smaller, potentially hostile Sunni Muslim stronghold like Falluja.

"You do not need Falluja in order to get Mosul," a spokesman for a U.S.-led anti-IS coalition, U.S. Army Colonel Steve Warren, said in a phone interview ten days ago when the government first announced its plans to recapture Falluja.

However, Falluja is Islamic State's closest bastion to Baghdad, believed to be the base from which militants have staged a campaign of suicide bombings in the capital that has increased pressure on Abadi to act to improve security.

Iraqi security forces gather near Falluja. Thomson Reuters

Baghdad bombs pressure Abadi

Abadi, a member of Iraq's Shi'ite majority, is trying to hold a ruling coalition together in the face of public protests against an entrenched political class. He has called for politicians to set aside differences and rally behind the army during the Falluja offensive.

Falluja would be the third major city in Iraq recaptured by the government after former dictator Saddam Hussein's home town Tikrit and Ramadi, the capital of Iraq's vast western Anbar province. Falluja lies in Anbar on the highway from Baghdad to Ramadi, and capturing it would give the government control of the main population centers of the fertile Euphrates River valley west of the capital for the first time in two years.

The United States is leading a coalition conducting air strikes in support of the Iraqi government offensive, and says it is having success in rolling back Islamic State both in Iraq and in Syria.

Shi'ite militia groups backed by Iran are also taking part in the offensive against Islamic State, but say they are holding back from participating in the main assault on Falluja to avoid inflaming sectarian tension.

Fighters from Iraqi Shiite group Kataib Sayyid al-Shuhada gather near Falluja, Iraq. Reuters/Thaier Al-Sudani

"Extreme violence"

Although most of Falluja's population is believed to have fled during six months of siege, 50,000 people are still thought to be trapped inside with limited access to food, water or healthcare. The United Nations' children's agency on Wednesday said at least 20,000 children remain in Falluja.

"We are concerned over the protection of children in the face of extreme violence," UNICEF Representative in Iraq Peter Hawkins said in a statement.

"Children face the risk of forced recruitment into the fighting" inside the besieged city, and "separation from their families" if they manage to leave, he added.

The World Food Programme said the humanitarian situation in the city was worsening as family food stocks were depleting, pushing prices to a level few can afford.

"The city is inaccessible for assistance and market distribution systems remain offline," the WFP said. "The only food available does not come from the markets, but from the stocks that some families still have in their homes."

(writing by Maher Chmaytelli and Peter Millership; editing by Peter Graff)