Iraqi army troops backed by pro-government Shi'ite militias have secured the highway through the Islamic State-occupied city of Baiji, residents and officials say.
Locals said the army was within a kilometre of breaking the Islamic State's five-month siege of Iraq's largest oil refinery.
Defence Ministry officials in Baghdad told journalists the refinery had been secured, but three military officers and two local residents said that announcement was premature.
They said that while IS largely had abandoned its positions around the refinery, the government-aligned forces remained more than 700 metres away, blocked from reaching the facility by mines, sniper fire and the possibility of an IS counterattack.
Most of the city and surrounding areas remain under the control of IS or its Sunni Muslim tribal allies, who appeared to be preparing a counteroffensive.
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"We control the highway through the city and control access to the refinery," said one Iraqi officer reached by phone in Baiji, who spoke only on the condition of anonymity because he wasn't authorised to talk to a reporter.
"But Daash and the tribes still control most of the city. We are within one kilometre of the refinery, but there are so many IEDs and bombs to dismantle".
Daash is an Arabic acronym for IS.
Another Iraqi officer on the scene gave a more upbeat account, saying Iraqi forces had reached the refinery and that the IS presence in the city was limited to suicide bombers and snipers.
He said government forces had taken control of Baiji's main city centre and the highway through it in a two-week operation that involved multiple airstrikes by the US-led coalition.
"Praise to Allah, we control the city of Baiji fully," said 1st Lieutenant Ghaith Hayali.
"There's just one kilometre between us and the refinery, and the only thing stopping us are the improvised explosive devices the terrorists have planted around the refinery."
Hayali said the troops were aware that suicide bombers still lurked nearby but that his men expected those attacks and were prepared to head them off.
Hayali predicted that the refinery could be completely under government control by Saturday, a development that would be a major economic and military victory against a backdrop of persistent IS advances elsewhere, including Anbar province to the west of Baghdad.
An end to the siege of the refinery also might be an economic boon for the government.
Before the siege forced a shutdown of the refinery, it produced 40 per cent of Iraq's petrol.
With the refinery not working, the country has had to import petrol from Kuwait and Turkey at prices far higher than the subsidised one set for sales to average Iraqis.
