Iraqi government forces and Kurdish peshmerga fighters on Sunday broke a siege by extremist group Islamic State (IS) on Amerli, a town located between Baghdad and the northern city of Kirkuk, sources told Al Jazeera.

At least 12,000 people were trapped in Amerli for over two months with little food or water, and had threatened mass suicide if the city fell to Islamic State fighters — who captured large swaths of northern Iraq in June.

Adel al-Bayati, mayor of Amerli, confirmed the report to Reuters, adding that government forces were inside the town.

"Security forces and militia fighters are inside Amerli now after breaking the siege and that will definitely relieve the suffering of residents," said Bayati.

The forces that broke the siege were reportedly mainly peshmerga fighters, Iraqi forces, and other armed volunteers — though there were reports that Iranian jets provided air support for the coalition against IS.

On Saturday, the U.S. military airdropped humanitarian aid to the trapped civilians of mostly Shia Turkmen descent. British, French and Australian planes also reportedly dropped aid.

“I can see the tanks of the Iraqi army patrolling Amerli’s streets now. I’m very happy we got rid of the Islamic State terrorists who were threatening to slaughter us,” Amir Ismael, a resident, told Reuters by phone.

On Monday, President Barack Obama notified Congress, as required by law, of his order for Saturday's strikes against members of IS and humanitarian aid drops to Iraqi civilians in need of food, water and medical supplies.

Iraqi military spokesman Qassim al-Atta said the battle was a "golden victory registered by the Iraqi security forces who are still fighting the terrorist groups in north and south areas of Amerli," adding that the town would serve as a launching pad to retake the northern province of Salahuddin, captured by IS fighters in June.

"The next step will be holding the ground tightly and liberating all the areas which link Amerli to Salahuddin. Our forces will gather in thousands in Amerli to march towards Tikrit," Atta announced on state television.

Before the siege was broken, IS fighters had surrounded Amerli. About 2,000 town men that IS sees as apostates largely fended off attempted attacks by the group.

Fearing murder, rape and other crimes, Amerli residents told Al Jazeera before the siege was broken that they would kill themselves if IS managed to enter the city. Male residents said they planned to kill their wives and children if that happened, and that they had already prepared the graves.

“In every three to four houses we have dug graves. If Islamic State storms our town everyone will be killing their wives and children and they will bury them,” said a government employee who asked that his name be withheld.

He added that the men’s wives agreed, saying they would rather die than be taken captive by the fighters.

The only question the women had was whether someone would shoot them, or they would do it themselves, said women who had been airlifted from the city to Baghdad earlier this week.

“All the women will kill themselves — either shoot themselves or use kerosene and burn themselves to death,” said Fatima Qassim, a beauty salon owner from Amerli. Fatima’s brother had stayed behind to defend the town with his wife and six children.

“He put eight bullets in his rifle and said if ISIS enters the town then I will kill my children one by one and then I will kill my wife and myself,” Fatima recalled. ISIS is short for the Islamic State of Iraq and Syria — the group's former name.

In previous weeks, American jets and drones have carried out air strikes against IS positions further north and later said the fight may take U.S. forces across the border into Syria. But President Barack Obama's official mandate justifying military action in Iraq was the protection of American personnel and interests as well as critical Iraqi infrastructure — which Amerli does not qualify for.

It is unclear whether the U.S. provided air support for the coalition that broke Islamic State's siege on the town, though Reuters reported that U.S. air strikes on IS positions near the town preceded the advance of Iraqi forces.

In a separate development on Sunday, Germany said that it would send enough weapons to arm 4,000 Kurdish fighters in northern Iraq to aid their fight against IS, saying the group's advance threatens to destabilize the Middle East.

Defense Minister Ursula von der Leyen said the equipment would include armor-piercing weapons like anti-tank rockets, thousands of assault rifles, hand grenades, mine-clearing equipment, night-vision goggles, field kitchens, and tents.

The move breaks with a post-war policy of not sending arms to conflict zones, but Chancellor Angela Merkel said northern Iraq is an "exception" because of Islamic State's violence.

"The lives of millions of people, the stability of Iraq and the whole region and ... due to the high number of foreign fighters, our security in Germany and Europe are being threatened," read a government statement issued after Merkel met with ministers to discuss details of the aid package.

Al Jazeera and wire services. Al Jazeera's Jane Arraf contributed to this report.