Islamic State inflicts major defeat on Kurdish forces for first time
Showing surprising strength and coordination, forces from the Islamic State - formerly ISIL - wrested control of the town of Zumar from the Kurdish military arm, the Peshmerga. It was the terrorist's first victory of the war over the Kurdish army.
Islamic State also took control of a key oil field in the region and the town of Sinjar, also held by the Kurds.
Kurdish forces poured in reinforcements, including special forces, to the town of Zumar this weekend to battle Islamic State fighters who had arrived from three directions on pickup trucks mounted with weapons, residents said.
The militants later hoisted their black flag over buildings in Zumar, a ritual that has in the past been followed by the mass execution of captured opponents and the violent imposition of an ideology that even al-Qaeda finds excessive.
The Islamic State later also seized the town of Sinjar, where witnesses said residents had fled after Kurdish fighters put up little resistance against the militants.
Islamic State has stalled in its drive to reach Baghdad, halting just north of the town of Samarra, 100 km (62 miles) north of the capital.
The Islamic State in Iraq and the Levant (ISIL) changed its name earlier this year and declared a caliphate in parts of Iraq and Syria. The group has already seized four oil fields, which help fund its operations.
The group 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.
It has capitalised on sectarian tensions and disenchantment with Iraq's Shi'ite Prime Minister Nuri al-Maliki.
Critics describe Maliki as an authoritarian leader who has put allies from the Shi'ite majority in key military and government positions at the expense of Sunnis, driving a growing number of the religious minority in Iraq to support the Islamic State and other insurgents. He is also at odds with the Kurds.
This is very bad news for Prime Minister Maliki. He had been counting on the Peshmerga as the only reliable fighting force in the northern part of Iraq. Maliki's stubborness in refusing to grant more autonomy to the Kurds, as well as opening up Iraqi politics to other minorities has weakened the national government to the point where an Islamic State takeover of the country is possible.
Baghdad, at the moment, appears relatively safe, although the Islamic State is carrying out mass casualty terrorist attacks within the city to soften up the opposition. The longer the political crisis goes on, the weaker the national government becomes. Unless Maliki can be convinced to reform, or step aside, there doesn't appear to be much hope for the continuation of a united Iraq.