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The BBC's Paul Wood met refugees who have fled to the Kurdish countryside
Islamist militants in Iraq have seized two new towns, widening their control after threatening to move on Baghdad.
The Sunni-led Islamists advanced into Saadiya and Jalawla in the Diyala province and surrounding areas as security forces abandoned their posts.
The US says it is looking at "all options", including military action, to help Iraq fight the insurgency.
The pledge came after the cities of Mosul and Tikrit fell to the militants, but the advance has slowed down.
Led by the Islamic State in Iraq and the Levant (ISIS), the insurgents have threatened to push to the capital, Baghdad and regions further south dominated by Iraq's Shia Muslim majority, whom they regard as "infidels".
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Analysis: Jeremy Bowen, BBC Middle East editor If ISIS can hold Mosul and consolidate its presence there it will have taken a giant step towards its goal of creating an Islamist emirate that straddles Iraq and Syria.
It would be the most significant act by a jihadist group since al-Qaeda attacked the US on 11 September 2001. It could also lead to other changes on the borders Britain and France imposed on the Middle East a century ago, starting with break-up of Iraq on sectarian lines.
The success of ISIS can only make the turmoil in the Middle East worse. ISIS is an ultra extremist Sunni Muslim group. Its success will deepen the sectarian conflict between Sunnis and Shias that is already the most dangerous fault line in the Middle East.
Iran, which is a majority Shia Muslim country, shares a border with Iraq. It has a direct line to Iraq's Shia Muslim Prime Minister, Nouri Maliki, and close links with some Iraqi Shia militias. The Iranians could direct their proxies, and even their own special forces units, at ISIS.
That might end up further inflaming the anger of Iraqi Sunnis, who have already helped the advance of ISIS through Iraq.
US air strikes, if they happen, might do the same thing. Once again in the Middle East, the Americans have limited options. Its invasion and occupation of Iraq in 2003 helped create and strengthen jihadist groups.
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How did Iraqi militants take over Mosul?
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US President Obama: "I don't rule out anything"
Unconfirmed reports on Thursday said Iraqi forces had launched air strikes on Mosul and Tikrit targeting the militants.
US President Barack Obama said he did not "rule out anything because we do have a stake in making sure these jihadists are not getting a permanent foothold in Iraq, or Syria for that matter".
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White House spokesman Jay Carney subsequently added that President Obama was referring to not ruling out air strikes. "We are not contemplating ground troops," he said.
Fears of ISIS sparking a wider Sunni uprising have increased with reports that former Baath Party members loyal to former Iraqi leader Saddam Hussein have joined forces with the jihadists.
The US will be reluctant to get drawn back into Iraq, or give backing to one side in what appears to have some of the dimensions of civil war, says the BBC's Jim Muir in Irbil - an area in autonomous Kurdish-controlled north.
It is becoming clear that the insurgents are not foreign fighters, as Iraq's Prime Minister Nouri Maliki alleges, our correspondent says, despite ISIS stealing the limelight.
Many strands of Sunni society alienated by Mr Maliki's rule appear to have joined them, he says.
Iraq's former PM Ayad Allawi says the country could be facing a break-up as a result of the insurgency led by Islamist militants
Iraq state TV airs footage said to be airstrikes on the ISIS-held city of Mosul
Iraqi men outside the army's main recruiting centre in Baghdad (12 June 2014) Iraqis gathered at the army's recruitment centre in Baghdad, after officials urged them to fight the militants
Still allegedly showing an Iraqi army vehicle with a Jihadist flag in Mosul (12 June 2014) Footage allegedly showing captured vehicles of Iraqi security forces with the ISIS flag in Mosul
However, an influential group of Sunni scholars has criticised ISIS's attempt to monopolise the situation.
The militants have imposed Islamic law in Mosul.
In its statement, the Association of Muslim Scholars - which is tied to the rebel military councils that include many former soldiers - urged tolerance in "liberated areas" and rejected the calls to move to Shia-dominated areas in Baghdad and southern Iraq.
The United Nations Security Council said on Thursday it unanimously supported Iraq's government and people in their "fight against terrorism".
Earlier it said the humanitarian situation around Mosul, from where up to 500,000 people have fled, was "dire and... worsening by the moment".
A parliamentary vote to grant PM Maliki emergency powers was delayed earlier after MPs failed to turn up.
Just 128 out of the 325 MPs were present for the vote.
Correspondents say the failure of the Iraqi parliament to achieve a quorum to vote on emergency powers says much about the fragmented state of Iraqi politics.
In the north of the country, Kurdish forces have claimed control of the oil city of Kirkuk, saying government forces have fled.
The Kurds - seen as a bulwark against the Sunni Muslim insurgents - have also been locked for years in a dispute with Baghdad over Kirkuk, seeking to incorporate it into their own autonomous area.
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ISIS in Iraq
An Islamist fighter near a burning Iraqi army Humvee in Tikrit, 12 June An Islamist fighter near a burning Iraqi army Humvee in Tikrit
  • The Islamic State in Iraq and the Levant (ISIS) has 3,000 to 5,000 fighters, and grew out of an al-Qaeda-linked organisation in Iraq
  • ISIS has exploited the standoff between the Iraqi government and the minority Sunni Arab community, which complains that Shia Prime Minister Nouri Maliki is monopolising power
  • It has already taken over Ramadi and Falluja, but taking over Mosul is its greatest achievement
  • The organisation is led by Abu Bakr al-Baghdadi, an obscure figure regarded as a battlefield commander and tactician who was once the leader of al-Qaeda in Iraq, one of the groups that later became ISIS.
Are you in Saadiya, Jalawla or Baghdad? Have you been affected by the latest developments? You can email haveyoursay@bbc.co.uk using the title 'Iraq'.

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