Iraqi and Kurdish forces have launched a new offensive on a town near Mosul as part of a massive operation aimed at retaking the country's second largest city from the Islamic State group.

The Kurdish forces, known as peshmerga, said they launched a dawn offensive on Sunday on two fronts to the northeast of Mosul, near the town of Bashiqa.

Major General Haider Fadhil, of Iraq's special forces, said they had also launched an assault on Bashiqa, surrounding it and seizing parts of the town. He said the Kurds had captured two villages near Bashiqa and a small Shiite shrine in the area.