State of emergency declared in Iraq province

Thousands of residents have have fled Iraq's second city of Mosul as the military abandoned their positions when radical jihadists took to the streets.

Soldiers and police officers were among those fleeing from the violence in Mosul and the surrounding areas after militants launched a major assault on the city.

Soldiers and police stripped off their uniforms and fled, before the militants used loudspeakers to declare they had "come to liberate" the city of some two million people.

An AFP journalist, himself fleeing the city with his family, said shops were closed, a police station had been set ablaze and that numerous security force vehicles had been burned or abandoned.

"We need a whole army to drive them out of Mosul."

Hundreds of families were seen fleeing. Some were on foot, carrying what they could, others in vehicles with their belongings piled on the roofs.

Thousands of Mosul residents had fled for the safety of the autonomous Kurdish region in the north.

Dozens of cars and trucks stretched out from one checkpoint on the boundary of the region, as people with plastic bags, suitcases and a pram waited to enter, some with young children in tow.

Iraqis fleeing violence in the Nineveh province wait in their vehicles at a Kurdish checkpoint (AAP)

"We can't beat them. We can't. They are well trained in street fighting, and we're not. We need a whole army to drive them out of Mosul," one officer, whose identity was withheld, told Reuters.

"The army forces threw away their weapons and changed their clothes and left their vehicles and left the city," said Mahmud Nuri, a displaced Mosul resident.

"We didn't see anyone fire a shot".

State of emergency declared

Prime Minister Nuri al-Maliki asked parliament to declare a state of emergency and announced the government would arm citizens to fight the militants.

 "We will not allow for the remainder of the ... province and the city to fall," he said in a live broadcast carried on Iraqi state television.

"This requires all efforts, both civilian and official, to confront this ferocious attack that harms all Iraqis, from a deteriorating security situation to a humanitarian crisis."

An army brigadier general said hundreds of militants from the Islamic State of Iraq and the Levant (ISIL) launched a major assault on the security forces late on Monday.

The assailants seized the provincial government headquarters and the Nineveh Operations Command as well as the airport, the army general said.

They also freed hundreds of prisoners from three jails.

Threat to stability

The United States has expressed deep concern over the situation in Iraq.

""It should be clear that ISIL is not only a threat to the stability of Iraq, but a threat to the entire region," State Department spokeswoman Jen Psaki said.

She stressed that Washington backed "a strong coordinated response to push back against this aggression" from the Islamic State of Iraq and Levant (ISIL).

The most powerful militant group in Iraq, ISIL is a key force in the rebellion against President Bashar al-Assad in neighboring Syria.

(AAP)