"They (the air strikes) were very accurate. There was no collateral damage... If Islamic State had gained control of the dam, many areas of Iraq would have been seriously threatened, even (the capital) Baghdad," Sheik Ahmed Abu Risha told Reuters.
The aerial assault drove Islamic State fighters away from the dam, according to a police intelligence officer in the vast western province of Anbar, a hotbed of Islamist insurgency.
A mix of fighter and bomber aircraft destroyed five Islamic State Humvees, one IS armed vehicle, an IS checkpoint and also damaged an IS bunker, the U.S. military added in a statement.
The strikes were Washington's first reported offensive into Anbar since it started attacks on Islamic State forces in the north of Iraq in August.
Almost three years afters U.S. troops withdrew from Iraq and 11 years after their invasion to topple Saddam Hussein, the war on Islamic State is drawing Washington back into the middle of Iraq's power struggles and bloody sectarian strife.
U.S. Defense Secretary Chuck Hagel said the strikes on the Sunni Muslim insurgents had been carried out at the request of the Shi'ite Muslim-led central government in Baghdad.
"If that dam would fall into (Islamic State's) hands or if that dam would be destroyed, the damage that that would cause would be very significant and it would put a significant, additional and big risk into the mix in Iraq," Hagel told reporters during a trip to Georgia's capital Tbilisi.
Obama vows to repel, defeat Islamic state
Obama said at the weekend he would explain to Americans this week his plan to "start going on some offense" against Islamic State. "We are going to be a part of an international coalition, carrying out air strikes in support of work on the ground by Iraqi troops, Kurdish troops, he said in an NBC TV interview.
"We are going to systematically degrade their capabilities. We're going to shrink the territory that they control. And ultimately we're going to defeat 'em."
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US launches Iraq air strikes against IS militants