Militants could flood some of Iraq's major cities by blowing up the country's biggest dam, it was feared last night.
Fighters from the Islamic State jihadist group seized control of the Mosul Dam yesterday after an offensive lasting barely 24 hours.
Its capture could prove a turning point in the growing civil war in the country.
The flood threat could give the Sunni fighters a key bargaining point in their bid to topple the Shi'ite-led government of prime minister Nuri al-Maliki.
The fighters from Islamic State, formerly known as ISIS, also took over an oilfield and three more towns after inflicting their first major defeat on Kurdish forces since sweeping through the region in June.
The Islamists overwhelmed Kurdish forces in Zumar after attacking from three directions in pick-up trucks mounted with weapons, and then hoisted their black flags, a ritual that usually precedes mass executions of their captured opponents.
'Inside the apostates' HQ': The Islamic State posted this picture of one of its masked fighters holding up a pistol and sitting at the desk of the mayor of Sinjar
On its Twitter feed, the Islamic State posted a picture of one of its masked fighters holding up a pistol and sitting at the abandoned desk of the mayor of Sinjar. Behind him was the image of a famous Kurdish guerilla leader.
In a statement on its website, The militants said their fighters had killed scores of Kurdish fighters.
'Hundreds fled leaving vehicles and a huge number of weapons and munitions and the brothers control many areas,' Islamic State said.
'The fighters arrived in the border triangle between Iraq, Syria and Turkey,' it said.
The group poses the biggest challenge to the stability of OPEC member Iraq since the fall of Saddam Hussein in 2003.
Since thousands of Iraqi soldiers fled the Islamic State offensive, Shi'ite militias and Kurdish fighters have been seen as a critical line of defence against the militants, who have threatened to march on Baghdad.
But yesterday's battles have called into question the effectiveness of the Kurdish fighters and have increased pressure on Iraqi leaders to form a power-sharing government capable of countering the Islamic State.
The group has systematically blown up Shi'ite mosques and shrines in territory it has seized, but so far its drive to reach Baghdad has stalled near the town of Samarra, 62 miles north of the capital.
Islamic State has been trying to consolidate its gains, setting its sights on strategic towns near oil fields, as well as border crossings with Syria so that it can move easily back and forth and transport supplies.
© Associated Newspapers Ltd.