Kurdish forces attacked Islamic State fighters near the Kurdish regional capital of Arbil in northern Iraq on Wednesday in a change of tactics supported by the Iraqi central government to try to break the Islamists' momentum.
The attack 40 km (25 miles) southwest of Arbil came after the Sunni militants inflicted a humiliating defeat on the Kurds on Sunday with a rapid advance through three towns, prompting Iraq's prime minister to order his air force for the first time to back the Kurdish forces.
"We have changed our tactics from being defensive to being offensive. Now we are clashing with the Islamic State in Makhmur," said Jabbar Yawar, secretary-general of the ministry in charge of the Kurdish peshmerga fighters.
The location of the clashes puts the Islamic State fighters closer than they have ever been to the Kurdish semi-autonomous region since they swept through northern Iraq almost unopposed in June.
Shortly after that lightning advance, thousands of U.S.-trained Iraqi soldiers fled. Kurdish fighters, who boast of their battles against Saddam Hussein's forces, stepped in as did Iranian-trained Shi'ite militias.
But the Islamic State gunmen's defeat of the peshmerga, whose name means "those who confront death", has called into question their reputation as fearsome warriors.
The Islamic State poses the biggest threat to Iraq's security since the fall of Saddam Hussein in 2003.
The group, which believes Shi'ites are infidels who deserve to be killed, has won the support of some Sunnis who don't agree with their ideology but share a fierce determination to topple Prime Minister Nuri al-Maliki.
Maliki, a Shi'ite, is seen as an authoritarian figure with a sectarian agenda whose alienation of Sunnis is destabilizing.
Iraq, an OPEC member, has returned to the dark days of 2006-2007 when a civil war peaked. Bombings, kidnappings and executions have again become part of daily life.
On Wednesday, 60 people were killed by an Iraqi government air strike on a Sharia court set up by Islamic State militants in a juvenile prison in Mosul, the office of Maliki's military spokesman said.
The Islamic State judge who ran the court, which routinely orders beheadings, was among those killed in the northern Iraqi city, the spokesman said.
Hospital officials and witnesses said earlier the strike killed 50 people in a prison set up by the Islamic State, making no mention of the court.
In Baghdad, car bombs exploded in crowded markets in several Shi'ite districts, killing 47 people, police said.
A roadside bomb killed three Shi'ites who volunteered to fight the Islamic State on a road between the town of Samarra and Mosul, a police official said.
In Taji, 20 km (12 miles) north of Baghdad, authorities found the bodies of six people who had been handcuffed and shot in the head and chest execution-style, medical sources said.
The Islamic State has declared a 'caliphate' in swathes of Iraq and Syria that it controls and threatens to march on Baghdad. Islamic State fighters and their Sunni militant and tribal allies also hold parts of western Iraq.
Maliki has ordered his air force to help the Kurds in their fight against the Islamic State, which seized an array of weapons including tanks and anti-aircraft guns from the Iraqi soldiers who fled in June.
Maliki was at odds with the Kurds over oil, budgets and land, but both sides put their differences aside, alarmed by the Islamic State's latest gains - a fifth oilfield and three more towns in the north. The group also reached Iraq's biggest dam.
Yawar confirmed the Kurds had re-established military cooperation with Baghdad.
"The peshmerga ministry sent a message to the Iraqi defense ministry requesting the convening of an urgent meeting on military cooperation. The joint committees have been reactivated," Yawar said by telephone.
Maliki, who has been serving in a caretaker capacity since an inconclusive election in April, has rejected calls by Kurds, Sunnis, some fellow Shi'ites and even regional power-broker Iran to step aside and make room for a less polarizing figure.
In his weekly televised address to the nation on Wednesday, he warned that any unconstitutional attempt to form a new government would open "the gates of hell" in Iraq.
Maliki rejected any outside interference in the process, an apparent reference to Tehran, which Iranian officials have said believes Maliki can no longer hold Iraq together.
Iran is now backing calls by Iraq's top cleric Grand Ayatollah Ali al-Sistani for Maliki to go and is looking for an alternative leader to combat the Sunni Islamist insurgency, the Iranian officials said.
The United States, which was a key backer of Maliki when he first came to office as an unknown in 2006, has urged Iraqi politicians to form a more inclusive government that can unify Iraqis and take on the Islamic State.
The Islamic State has put Iraq's survival as a unified state in jeopardy.
The capture of one of the towns, Sinjar, home to many of Iraq's Yazidi minority sect in a weekend offensive could lead to a humanitarian crisis.
Yazidis, ethnic Kurds who follow an ancient religion derived from Zoroastrianism, are at high risk of being executed because the Islamic State militants view them as devil worshippers.
Yawar said 50,000 Yazidis now hiding on a mountain risked starving to death if they were not rescued within 24 hours.
"Urgent international action is needed to save them. Many of them, mainly the elderly, children and pregnant women, have (already) died," he said.
"We can't stop the Islamic State from attacking the people on the mountain because there is one paved road leading up to the mountain and it can be used by them. They (Islamic State fighters) are trying to get to that road."