Iraqi security forces battled insurgents targeting the country's main oil refinery and claimed to regain partial control of a city near the Syrian border Wednesday, trying to blunt a weeklong offensive by militants who diplomats fear may have abducted some 100 foreign workers.
The campaign by the al-Qaida-inspired Islamic State of Iraq and the Levant has raised the spectre of the sectarian warfare that nearly tore the country apart in 2006 and 2007 and the doubts that followed the 2003 U.S.-led invasion now haunt those trying to decide how to respond.
U.S. President Barack Obama will brief lawmakers later Wednesday at the White House on what options his wary country could take.
Iraqi Prime Minister Nouri al-Maliki, meanwhile, struck an optimistic tone after soldiers abandoned their posts in the wake of the initial offensive, promising his nation would teach the attackers a "lesson."
"We have now started our counteroffensive, regaining the initiative and striking back," al-Maliki said.
Al-Maliki's relatively upbeat assessment came as the military claimed its forces regained parts of the strategic city of Tal Afar near the Syrian border, which Islamic State fighters captured Monday. Its closeness to the Syrian border strengthens the Islamic State's plan to carve out an "Islamic emirate" stretching across the Iraq-Syria border.
It also came hours after the chief military spokesman, Lt. Gen. Qassim al-Moussawi, said government forces repelled an attack by militants on the country's largest oil refinery at Beiji, some 250 kilometres north of the capital, Baghdad.
Al-Moussawi said 40 attackers were killed in fighting there overnight and on Wednesday morning. There was no independent confirmation of his claims, nor those on the Iraqi military retaking neighbourhoods in Tal Afar. The areas are in territories held by insurgents that journalists haven't been able to access.
The Beiji refinery accounts for a little more than a quarter of the country's entire refining capacity — all of which goes toward domestic consumption for things like gasoline, cooking oil and fuel for power stations. Any lengthy outage at Beiji risks long lines at the gas pump and electricity shortages, adding to the chaos already facing Iraq.
Iraq's once-dominant Sunni minority has long complained of discrimination by al-Maliki's government and excesses by his Shiite-led security forces. Al-Maliki has consistently rejected charges of bias against the Sunnis and has in recent days been stressing the notion that the threat posed by the Islamic State will affect all Iraqis regardless of their ethnic or religious affiliations.
Al-Maliki also appeared Tuesday night on television with Sunni leaders and politicians as a sign of solidarity.
Some 275 armed American forces are being positioned in and around Iraq to help secure U.S. assets as Obama also considers an array of options for combating the Islamic militants, including airstrikes or a contingent of special forces.
Iraq has the world's fifth-largest known crude oil reserves, with an estimated 143 billion barrels, according to the U.S. Energy Information Administration. It produced some 2.58 million barrels of oil day in May, according to the Oil Ministry.
The price of oil neared $107 on Wednesday after easing slightly Tuesday.