Al-Hadba minaret at the Grand Mosque is seen through a building window in the old city of Mosul, Iraq June 1, 2017. Picture taken June 1, 2017. [Photo/Agencies]

MOSUL/ERBIL, Iraq - Islamic State militants on Wednesday blew up the Grand al-Nuri Mosque of Mosul and its famous leaning minaret, an Iraqi military statement said, as Iraqi forces seeking to expel the group from the city closed in on the site.

It was from this medieval mosque three years ago that the militants' leader Abu Bakr al-Baghdadi declared a self-styled "caliphate" spanning parts of Syria and Iraq.

Islamic State's Amaq news agency accused American aircraft of destroying the mosque, a claim swiftly denied by the US-led international coalition fighting the hardline Sunni group.

"We did not strike in that area," coalition spokesman US Air Force Colonel John Dorrian told Reuters by phone.

"The responsibility of this devastation is laid firmly at the doorstep of ISIS," said a statement from the commander of the coalition's ground component, US Army Major General Joseph Martin, using an acronym for Islamic State.

The Iraqi military's media office distributed a picture taken from the air that appeared to show the mosque and minaret flattened in the middle of the small houses of the Old City, the historic district where the militants are besieged.

"The Daesh (Islamic State) terror gangs committed another historical crime by blowing up the al-Nuri mosque and its historical al-Hadba minaret," the Iraqi military statement said.

The Iraqis lovingly call the minaret Al-Hadba, or "the hunchback."

A video seen on social media showed the minaret collapsing vertically in a vast billow of sand and dust, as a woman lamented in the background, saying "the minaret, the minaret, the minaret."

The explosions happened as Iraq's elite Counter Terrorism Service units, which have been battling their way through Mosul's Old City, got to within 50 meters (164 feet) of the mosque, the Iraqi military statement said.

An Iraqi military spokesman gave the timing of the explosion as 9:35 p.m (1835 GMT).

"This is a crime against the people of Mosul and all of Iraq, and is an example of why this brutal organization must be annihilated," said US Major General Martin.

Iraqi forces said earlier on Wednesday they had started a push towards the mosque.

The forces on Tuesday had encircled the jihadist group's stronghold in the Old City, the last district under Islamic State control in Mosul.

Al-Baghdadi proclaimed himself "caliph" - or ruler of all Muslims - from the mosque's pulpit on July 4, 2014, after the insurgents overran vast swathes of Iraq and Syria.

His black flag had been flying over its 150-foot (45-metre)leaning minaret since June 2014.

Baghdadi's speech from the mosque was also the first time he revealed himself to the world, and the footage broadcast then is to this day the only video recording of him as "caliph."