NAWARAN, Iraq (AFP) - Kurdish forces launched a major assault on Thursday (Oct 20) on a town held by the Islamic State in Iraq and Syria (ISIS) group near Mosul, opening a new front in the offensive to wrest back the militants' last bastion in Iraq.

Prime Minister Haider al-Abadi told an international meeting in Paris that the four-day-old offensive was "advancing faster than expected".

France and Iraq were co-chairing the meeting on the future of Mosul, which observers have warned could raise even greater humanitarian and interconfessional challenges than the massive military operation to retake it.

In some areas, the Iraqi advance was met by a trickle of civilians fleeing both the fighting and the militants who ruled them for two years, but the feared mass exodus from Mosul had yet to materialise.

The main target of the latest Kurdish push was the town of Bashiqa, north-east of Mosul. Iraqi forces also pressed assaults towards the city from the east and south.

"The objectives are to clear a number of nearby villages and secure control of strategic areas to further restrict ISIL's movements," the peshmerga command said, using an alternative acronym for ISIS.

At around 6am (11am Singapore time), bulldozers flattened a path for forces in armoured vehicles to carve their way down towards Bashiqa.

As tanks and personnel carriers prepared to advance, a shadow glided above them and one peshmerga shouted "drone!" Fighters opened fire at it with every weapon available, causing an almighty din and lighting up the dim morning sky, until it fell to the ground and the troops resumed their advance.

An AFP reporter in the village of Nawaran near Bashiqa saw the downed drone, a Raven RQ-11B model similar to a booby-trapped one that killed two Kurdish fighters and wounded two French soldiers a week ago.

"These drones belong to ISIS... So we shot this drone and brought it down. As you can see, the peshmerga destroyed it," said General Aziz Weysi, commander of the peshmerga's elite Zaravani task force.

"These drones can do observation and can explode. They sent this one but it did not explode," he told AFP.

Iranian Kurdish rebels of the Kurdistan Freedom Party (PAK) were involved in the operation alongside the peshmerga and apparently taking a front-line role.

East of Mosul, where the peshmerga launched the offensive on Monday, Iraq's elite federal counter-terrorism service was taking control of Bartalla, a town whose mostly Christian residents fled the ISIS advance two years ago.

"There is resistance, we already blew up three car bombs today," Lieutenant-General Abdelwahab al-Saadi, who is commanding operations in the area, told AFP by telephone.

Bartalla, which lies less than 15km from the eastern edge of Mosul, saw fierce resistance from the militants earlier this week.

Iraqi forces were also poised to attack nearby Qaraqosh, which was the largest Christian town in Iraq before ISIS swept across the Nineveh plain in August 2014, forcing everyone to flee.

Iraqi federal forces and the peshmerga have not divulged casualty figures in this offensive.

On Thursday, ISIS released a short video showing the bodies of what it said were two peshmerga, hung by their feet from a bridge in central Mosul.

To the south, Iraqi forces were making steady gains, working their way up the Tigris Valley and meeting small numbers of fleeing civilians heading the other way.

Dozens of men, women and children who escaped from the village of Mdaraj, south of Mosul, some on foot and others with vehicles, were waiting as police searched their belongings.

"We snuck out," said a man who gave his name as Abu Hussein.

He said that the huge plumes of black smoke from fires lit by ISIS to provide cover from air strikes had helped them slip out unnoticed.

The UN fears up to a million people still trapped inside Mosul could be forced to flee by the fighting, sparking a humanitarian emergency.

But Iraqi forces are still some distance from the city limits and no major outflows of civilians have been reported yet.

"Reports indicate that military activities remain concentrated in less populated areas, with no large-scale civilian displacement recorded at this stage," UN aid chief Stephen O'Brien said late Wednesday.

The Iraqi prime minister told the Paris meeting on Mosul's future that the operation to retake it was making progress.

"We are advancing faster than we had expected and planned," he said by video link.

French President Francois Hollande told the meeting that jihadists were already leaving for Raqa, their stronghold in neighbouring Syria.

"We can't afford mistakes in the pursuit of the terrorists who are already leaving Mosul for Raqa," Hollande said. "We cannot allow those who were in Mosul to evaporate."

Mosul, Iraq's second city, was seized by ISIS in June 2014.

Its capture touched off an offensive that saw the militants conquer about a third of the country and declare a "caliphate" straddling Iraq and Syria.

ISIS' rule has seen some of the worst war crimes in recent history and the task of reconciling all the components of the area's complex religious and ethnic mosaic is daunting.

"Given the sheer size of Mosul - and its experience of savage rule at the hands of the Islamic State - revenge killing will likely be an issue in the days and months ahead," according to the Soufan consultancy.

"A massive effort will be required to begin to heal what is a truly fractured city and society," it said.