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Iraqi security forces launched on Sunday an offensive to take back the city of Tal Afar, their next objective in the U.S.-backed campaign to defeat Islamic State militants, Prime Minister Haider al-Abadi said.

"You either surrender, or die," Abadi said in a televised speech announcing the offensive, addressing the militants.

A longtime stronghold of hardline Sunni insurgents, Tal Afar, 50 miles (80 km) west of Mosul, was cut off from the rest of the Islamic State-held territory in June.

The city is surrounded by Iraqi government troops and Shi'ite volunteers in the south, and Kurdish Peshmerga fighters in the north.

About 2,000 battle-hardened militants remain in the city, according to U.S. and Iraqi military commanders.

They are expected to put up a tough fight, even though intelligence from inside the city indicates they have been exhausted by months of combat, aerial bombardments, and by the lack of fresh supplies.

Hours before Abadi's announcement, the Iraqi air force dropped leaflets over the city telling the population to take their precautions. "Prepare yourself, the battle is imminent and the victory is coming, God willing," they read.

Islamic State's self-proclaimed "caliphate" effectively collapsed last month, when U.S.-backed Iraqi forces completed the takeover of the militants' capital in Iraq, Mosul, after a nine-month campaign.

But parts of Iraq and Syria remain under its control, including Tal Afar, a city with a pre-war population of about 200,000.

Tal Afar experienced cycles of sectarian violence between Sunnis and Shi'ites after the U.S.-led invasion of Iraq in 2003, and has produced some of Islamic State's most senior commanders.

Waves of civilians have fled the city and surrounding villages under cover of darkness over the past weeks, although several thousand are estimated to remain, threatened with death by the militants who have held a tight grip there since 2014.

Residents who left Tal Afar last week told Reuters the militants looked exhausted.

"(Fighters) have been using tunnels to move from place to place to avoid air strikes," said 60-year-old Haj Mahmoud, a retired teacher. "Their faces looked desperate and broken."

The main forces taking part in the offensive are the Iraqi army, Federal Police and the elite U.S.-trained Counter-Terrorism Service (CTS), Iraqi commanders told Reuters.

Shi'ite Popular Mobilization Forces (PMF), some of which are trained and armed by Iran, said they will also take part in the battle. Their involvement is likely to worry Turkey, which claims an affinity with the area's predominantly ethnic Turkmen population.

The U.S.-led coalition said over the past days it had carried out dozens of air strikes on Tal Afar, targeting weapons depots and command centers, in preparation for the ground assault.

"Intelligence gathered shows clearly that the remaining fighters are mainly foreign and Arab nationals with their families and that means they will fight until the last breath," Colonel Kareem al-Lami, from the Iraqi army's 9th Division, told Reuters earlier this week.

But Lami said Tal Afar's open terrain and wide streets will allow tanks and armored vehicles easy passage. Only one part of Tal Afar, Sarai, is comparable to Mosul's Old City, where Iraqi troops were forced to advance on foot through narrow streets moving house-to-house in a battle that resulted in the near total destruction of the historic district.

The United Nation's International Organization for Migration (IOM), estimates that about 10,000 to 40,000 people are left in Tal Afar and surrounding villages. Aid groups say they are not expecting a huge civilian exodus as most the city's former residents have already left.

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Iraq starts offensive to take back Tal Afar from Islamic State - CNBC

Smoke rises after an air strike during fighting between members of the Syrian Democratic Forces and Islamic State militants in Raqqa, Syria, 20 August 2017 (Reuters)

The high civilian death toll from US-led airstrikes in Syria despite strict warnings from the United Nations is rooted in Washingtons lack of respect for international and humanitarian law, a London-based expert says.

Catherine Shakdam told Press TV that the manipulative approach is meant to cover up the atrocities committed by the US army so that it will not be held accountable for its war crimes.

Washington has never really abided by international law. Not caring how many people will die no matter [whether] its in Iraq or Syria or anywhere else, the US continues to target what it wants whenever it gets to.

She said "manipulation of numbers and truth" is a way of life for the US Army, adding Washington does all it can to portray its actions as justifiable and therefore holding it accountable for its atrocities can be problematic.

The US-led coalition has acknowledged that its air raids against purported Daesh positions inside Syria and Iraq have killed at least 600 civilians since June 2014. The figure, however, is much lower than the death toll documented by independent groups.

The military alliance has repeatedly been accused of targeting and killing civilians. It has also been largely incapable of fulfilling its declared aim of destroying Daesh.

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'US Army covering up crimes in Syria, Iraq' - Press TV

ABU GHADDUR, Iraq U.S.-backed Iraqi forces on Sunday launched a multi-pronged assault to retake the town of Tal Afar, west of Mosul, marking the next phase in the countrys war on the Islamic State group.

Tal Afar and the surrounding area is one of the last pockets of IS-held territory in Iraq after victory was declared in July in Mosul, the countrys second-largest city. The town, about 150 kilometers (93 miles) east of the Syrian border, sits along a major road that was once a key IS supply route.

The city of Tal Afar will be liberated and will join all the liberated cities, Prime Minister Haider al-Abadi said in a televised speech early Sunday. He was dressed in a black uniform of the type worn by Iraqi special forces.

He called on the militants to surrender or die.

By early afternoon, Lt. Gen. Abdul-Amir Rasheed Yar Allah, who commands the operation, said the forces had recaptured a series of villages east, southwest and northwest of town.

The U.S.-led coalition providing air and other support to the troops praised what it said was a capable, formidable, and increasingly professional force.

They are well prepared to deliver another defeat to IS in Tal Afar, like in Mosul, the coalition said in a statement.

On the front lines, pillars of smoke could be seen rising in the distance as U.S. and Belgian special forces worked with Iraqi troops to establish a position on the roof of a house. They later fired mortar rounds and launched drones.

Lt. Gen. Riyad Jalal Tawfiq, of the Iraqi army, said IS had deployed small teams of attackers as well as suicide car bombs and roadside bombs.

The Coalition estimates that approximately 10,000-50,000 civilians remain in and around Tal Afar. In past battles, IS has prevented civilians from fleeing and used them as human shields, slowing Iraqi advances.

Hours after announcing the operation, the United Nations expressed concerns over the safety of the civilians, calling on warring parties to protect them.

Iraqi authorities have set up a toll-free number and a radio station to help guide fleeing civilians to safety.

A stepped up campaign of airstrikes and a troop buildup has already forced tens of thousands to flee Tal Afar, threatening to compound a humanitarian crisis sparked by the Mosul operation.

Some 49,000 people have fled the Tal Afar district since April, according to the United Nations. Nearly a million people remain displaced by the nine-month campaign to retake Mosul.

The U.N. Humanitarian Coordinator for Iraq, Lise Grande, described the situation inside Tal Afar as very tough, with food and water running out and many lacking basic necessities.

Families are trekking for 10 to 20 hours in extreme heat to reach mustering points, she said. They are arriving exhausted and dehydrated.

Iraqi forces have driven IS from most of the major towns and cities seized by the militants in the summer of 2014, including Mosul, which was retaken after a grueling nine-month campaign.

But along with Tal Afar, the militants are still fully in control of the northern town of Hawija as well as Qaim, Rawa and Ana, in western Iraq near the Syrian border.

Tal Afar has been a stronghold for extremists in Iraq since the 2003 U.S.-led invasion that toppled Saddam Hussein. Many senior leaders of IS and its predecessor, al-Qaida in Iraq, were from Tal Afar.

Iraqs state-sanctioned and mostly Shiite militias largely stayed out of the operation to retake Mosul, a mostly Sunni city about 80 kilometers (50 miles) to the east, but have vowed to play a bigger role in the battle for Tal Afar, which was home to both Sunnis and Shiites, as well as ethnic Turkmen, before it fell to IS, a Sunni extremist group. The militias captured Tal Afars airport, on the outskirts of the town, last year.

Their participation in the coming offensive could heighten sectarian and regional tensions. The towns ethnic Turkmen community maintained close ties to neighboring Turkey. Turkish officials have expressed concern that once territory is liberated from IS, Iraqi Kurdish or Shiite forces may push out Sunni Arabs or ethnic Turkmen.

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Iraq launches operation to take back IS-held town near Mosul - The Denver Post

SULAIMANIYA, Iraq (Reuters) - Iraq's Kurds may consider the possibility of postponing a planned Sept. 25 referendum on independence in return for financial and political concessions from the central government in Baghdad, a senior Kurdish official said.

A Kurdish delegation is visiting Baghdad to sound out proposals from Iraqi leaders that might convince the Kurds to postpone the vote, according to Mala Bakhtiar, executive secretary of the Patriotic Union of Kurdistan (PUK) Politburo.

The United States and other Western nations fear the vote could ignite a fresh conflict with Baghdad and possibly neighboring countries, diverting attention from the ongoing war against Islamic State (IS) militants in Iraq and Syria.

U.S. Secretary of State Rex Tillerson formally asked Massoud Barzani, president of the autonomous Kurdistan Regional Government (KRG), 10 days ago to postpone the referendum.

"What thing would Baghdad be prepared to offer to the (Kurdish) region" in return for postponing the referendum, Bakhtiar, speaking about the talks with the Shi'ite Muslim-led Baghdad ruling coalition, said in an interview.

On the economic side, Baghdad should be ready to help the Kurds overcome a financial crisis and settle debts owed by their government, he told Reuters in the Kurdish city of Sulaimaniya.

He estimated the debt at $10 to $12 billion, about equal to the KRG's annual budget, owed to public works contractors and civil servants and Kurdish peshmerga fighters whose salaries have not been paid in full for several months.

At the political level, Baghdad should commit to agree to settle the issue of disputed regions, such as the oil-rich area of Kirkuk where Arab and Turkmen communities also live.

The Kurdish delegation would then convey the proposals to Kurdish political parties to make a decision on whether they are good enough to justify a postponment of the vote, he said, insisting on the Kurdish right to hold the vote at a later date.

"We don't accept to postpone the referendum with nothing in return and without fixing another time to hold it," he said.

Baghdad stopped payments from the Iraqi federal budget to the KRG in 2014 after the Kurds began exporting oil independently from Baghdad, via a pipeline to Turkey.

The Kurds say they need the extra revenue to cope with increased costs incurred by the war against Islamic State and a large influx into KRG territory of displaced people.

The self-proclaimed IS "caliphate" effectively collapsed in July when U.S.-backed Iraqi forces completed the recapture of Mosul from the militants in a nine-month campaign in which Kurdish peshmerga fighters took part.

The Sunni Muslim jihadists remain, however, in control of territory in western Iraq and eastern Syria. The United States has pledged to maintain its support of allied forces in both countries until the militants' total defeat.

The Kurds have been seeking an independent state since at least the end of World War One, when colonial powers divided up the Middle East and left Kurdish-populated territory split between modern-day Turkey, Iran, Iraq and Syria.

Turkey, Iran and Syria, which together with Iraq have sizeable Kurdish communities, all oppose an independent Kurdistan. Prime Minister Abadi's government has rejected the planned referendum as "unilateral" and unconstitutional.

Barzani, whose father led struggles against Baghdad in the 1960s and 1970s, told Reuters in July the Kurds would take responsibility for the expected "yes" outcome of the referendum, and implement the outcome through dialogue with Baghdad and regional powers to avoid conflict.

"We have to rectify the history of mistreatment of our people and those who are saying that independence is not good," Barzani said in an interview in the KRG capital Erbil.

"Our question to them is, 'If it's not good for us, why is it good for you?'".

Iraq's majority Shi'ite population mainly lives in the south while the Kurds, largely secular Sunnis, and Sunni Arabs inhabit two swathes of the north. Central Iraq around Baghdad is mixed.

Kurdish officials have said disputed areas, including the Kirkuk region, will be covered by the referendum, to determine whether they would want to remain in Kurdistan or not.

The Kurdish peshmerga in 2014 prevented Islamic State from capturing Kirkuk, in northern Iraq, after the Iraqi army fled in the face of the militants. The peshmerga now effectively run the Kirkuk region, also claimed by Turkmen and Arabs.

Hardline Iran-backed Iraqi Shi'ite militias have threatened to expel the Kurds from this region and three other disputed areas - Sinjar, Makhmour and Khanaqin.

Reporting by Maher Chmaytelli; editing by Mark Heinrich

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Iraq's Kurds might put off independence vote in return for concessions from Baghdad: official - Reuters

SINGAPORE/DUBAI (Reuters) - Iraq has informed its customers that it plans to change its price benchmark for Basra crude in Asia to DME Oman futures from January, the country's latest move to reform its oil sales.

The proposed change by state-oil marketer SOMO would mark a major shift by OPEC's second-largest producer away from fellow members Saudi Arabia, Kuwait and Iran, which have been using price assessments from global agency S&P Global Platts as their benchmark for decades.

It throws down the gauntlet on setting prices for more than 12 million barrels per day of Middle East crude in Asia, challenging the role of the world's top exporter Saudi Arabia.

"In an effort to realize the intrinsic value of our crude exports to Asia as to be in alignment with the recent market perception, we are contemplating a change of the current pricing formula for the Asian market," SOMO said in a letter dated Aug. 20 and sent to its customers, according to a copy seen by Reuters on Monday.

It asked customers for opinions on the plan by Aug. 31.

SOMO and the Dubai Mercantile Exchange (DME) did not immediately respond to Reuters requests for comment.

Iraq has been reforming its oil sector - including launching crude sales through auctions on DME to achieve higher prices and setting up trading and shipping joint ventures - in what is seen as a drive to gain influence and bring in more revenue as the country seeks to rebuild its economy.

"DME has shown good practice and better transparency than Platts, they also have an auction system," one source familiar with the matter said.

The move also appears to reflect SOMO's aim to lead a change in crude pricing rather than following Saudi Arabia, OPEC's biggest producer whose crude official selling prices (OSPs) set the trend for other major Middle East producers.

Iraqi crude grades are not used in any of the Middle East price benchmarks. Platts assesses its Dubai price based on deliveries of Dubai, Oman, Abu Dhabi's Upper Zakum and Qatari Al-Shaheen crude.

"The Iraqis probably want to get in on the game of being a benchmark grade," a Singapore-based oil trader said.

SOMO has proposed pricing crude loading in the current month using DME Oman prices from two months previously, according to SOMO's letter to its customers.

"Such a mechanism is intended to reflect the real value of Iraqi crude oil based on the trading month in the Asia market," SOMO said in the letter.

The change in the benchmark will affect the pricing of about 2 million barrels per day of crude that are shipped to Asia, or close to two-thirds of Iraqi crude exports from the southern port of Basra, the outlet for most of the country's crude.

"Lately they (the Iraqis) have managed to achieve good premiums via the DME action, so there is some added value," said an industry source at a Middle East producer.

Since April, Iraq has sold 1-2 cargoes of Basra crude per month through an auction platform on the DME as a test for future Iraqi oil sales.

The Oman crude futures, launched in 2007 by the DME, is the only liquid futures contract for Middle East crude in Asia.

SOMO is not expected to change the way it prices its oil for Europe and the United States, said one of the sources. It prices its European exports against dated Brent, and uses Argus Sour Crude Index (ASCI) as the benchmark for its U.S. oil sales.

Reporting by Florence Tan in Singapore and Rania El Gamal in Dubai; Editing by Richard Pullin and Susan Fenton

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Iraq plans to shift Basra crude price benchmark for Asia from January - Reuters