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By Isabel Coles and Saif Hameed
ERBIL/BAGHDAD, Iraq (Reuters) - Thousands of Iraqi civilians have fled Tal Afar as Shi'ite paramilitary groups close in around the Islamic State-held town on the road between Mosul and Raqqa, the main cities of the militant group's self-styled caliphate in Iraq and Syria.
The exodus from Tal Afar, 60 km (40 miles) west of Mosul, is worrying humanitarian organizations as some of the civilians are heading into insurgent territory, where aid cannot be sent to them, provincial officials said.
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Popular Mobilisation units, a coalition of mostly Iranian-backed militias, are trying to encircle Tal Afar, a largely ethnic Turkmen town, as part of the offensive to capture Mosul, Islamic State's last major stronghold in Iraq.
About 3,000 families have left the town, with about half heading southwest, towards Syria, and half northward, close to Kurdish-held territory, said Nuraldin Qablan, a Tal Afar representative on the Nineveh provincial council, now based in the Kurdish capital Erbil.
"We ask Kurdish authorities to open a safe passage for them," he told Reuters.
He said Islamic State allowed people to leave on Sunday after firing mortars at Popular Mobilisation positions at the airport, and Popular Mobilisation forces responded.
The offensive started on Oct. 17 with air and ground support from a U.S.-led coalition. It is turning into the most complex campaign in Iraq since the 2003 invasion that toppled Saddam Hussein and empowered the nation's Shi'ite majority.
Those fleeing Tal Afar are Sunnis, who are in a majority in Nineveh province in and around Mosul. Tal Afar also had a Shi'ite community, which fled in 2014 when the Sunnis of Islamic State swept through the region.
Turkey is alarmed that Iran could extend its power through proxy groups to an area close to Turkey and Syria, where Ankara is backing rebels opposed to the Russian and Iranian-backed Syrian President Bashar al-Assad.
Citing close ties to Tal Afar's Turkmen population, Turkey has threatened to intervene to prevent revenge killings should Popular Mobilisation forces, known as Hashid Shaabi, storm the town.
"People are fleeing due to the Hashid's advance, there are great fears among the civilians," said Qablan.
"Tal Afar is more or less empty now," said another official.
Iraqi Prime Minister Haider al-Abadi tried to allay fears of ethnic and sectarian killings in Tal Afar, saying any force sent to recapture it would reflect the city's diversity.
A prominent leader of the Popular Mobilisation units said Shi'ite forces had linked up with peshmerga fighters west of Mosul and completed the encirclement of the city and Tal Afar.
Abu Mahdi al-Mohandes said they had reached a junction where the Kurdish forces were deployed in Sinjar, close to Syria and west of Mosul and Tal Afar.
Islamic State still controls the road between Mosul and Tal Afar, he said in comments on the Popular Mobilisation website. "This is what we are dealing with now," Mohandes said, implying the militias would try to separate Mosul from Tal Afar.
Mosul is already ringed to the north, south and east by Iraqi government and peshmerga forces. Iraq's U.S.-trained Counter Terrorism Service unit breached Islamic State defenses in east Mosul at the end of October and is fighting to expand its foothold there.
AIR STRIKES ON MOSUL
The Iraqi military estimates there are 5,000 to 6,000 insurgents in Mosul facing a 100,000-strong coalition of Iraqi government units, Kurdish peshmerga and Shi'ite militias.
Mosul's capture is seen as crucial towards dismantling the caliphate, and Islamic State leader Abu Bakr al-Baghdadi, believed to have withdrawn to a remote area near the Syrian border, has told his fighters there can be no retreat.
A Mosul resident said air strikes had intensified in western parts of the city. The strikes targeted an industrial area where Islamic State is thought to be making booby traps and car bombs.
The militants are dug in among more than a million civilians as a tactic to hamper air strikes. They are moving around the city through tunnels, driving suicide car bombs into advancing troops and hitting them with sniper and mortar fire.
Iraqi authorities have not released overall casualty estimates, but the United Nations said on Saturday that growing numbers of wounded are overwhelming aid groups.
More than 68,000 people are registered as displaced by the fighting, moving from villages and towns around the city to government-held areas, according to U.N. estimates.
The figure does not include the thousands of people rounded up in villages around Mosul and forced to accompany Islamic State fighters to cover their retreat towards the city as human shields. It also does not include the 3,000 families which have fled Tal Afar.
In some cases, men of fighting age were separated from those groups and summarily killed, residents and rights groups said.
“These victories would not have occurred if it weren’t for the cooperation of civilians with the security forces,” Abadi told a press conference in Baghdad, confirming the role of informers inside the city.
Earlier this month, the bodies of at least 20 people killed by Islamic State were hung up across the city - five crucified at a traffic junction - to warn residents against cooperating with the Iraqi military.
A taxi driver said he saw a group of women wailing under a traffic signal where the body of a young man was on display, before they cut him down, put him into the back of their car and drove away. One was crying "my son, my son."
(Writing by Maher Chmaytelli; Editing by Dominic Evans and Giles Elgood)