BASHIQA - Iraqi Kurdish forces have seized the town of Bashiqa near Mosul from the Islamic State group, an official said Tuesday, as US-backed militia forces advanced on the militants' Syrian stronghold Raqa.

Capturing Bashiqa would be a final step in securing the eastern approaches to Mosul, three weeks into an offensive by Iraqi forces to retake the country's second city. Islamic State fighters have abducted 295 former Iraqi Security Forces members near Mosul and forced 1,500 families to retreat with them from the town of Hammam al Alil towards Mosul airport, UN human rights spokeswoman Ravina Shamdasani said on Tuesday.

"People forcibly moved or abducted, it appears, are either intended to be used as human shields or - depending on their perceived affiliations - killed," she said.

Iraqi troops have also seized the town of Hamam al-Alil south of Mosul, and on Tuesday investigators carried out an initial examination of a mass grave site discovered in the area. Bashiqa was under the "complete control" of Kurdish peshmerga forces, Jabbar Yawar, the secretary general of the Kurdish regional ministry responsible for the fighters, told AFP. "Our forces are clearing mines and sweeping the city," Yawar said. An AFP correspondent on the outskirts of Bashiqa said clashes were ongoing, with three air strikes hitting the town and gunfire and an explosion heard.

The peshmerga said there were still some suicide bombers and snipers there, and that about five percent of the town remained under militant control. Iraqi forces have been tightening the noose around Mosul since launching the offensive on October 17, with elite troops last week breaching city limits.

Upping pressure on the militants, the Kurdish-Arab Syrian Democratic Forces (SDF) militia alliance on Saturday began its own offensive on IS's other main bastion, Raqa in Syria.

Raqa and Mosul are the last major cities in Syria and Iraq under IS control, and their capture would deal a knockout blow to the self-styled "caliphate" it declared in mid-2014.

The US-led coalition that launched operations against IS two years ago is providing crucial backing to both offensives, with air strikes and special forces advisers on the ground.

SDF forces have been pushing south from areas near the Turkish border towards Raqa, and alliance spokeswoman Jihan Sheikh Ahmed said Tuesday they had moved to within 36 kilometres (22 miles) of the city.

"Two more villages have been taken since yesterday," she told AFP, adding that SDF forces had so far advanced 14 kilometres (nine miles) closer to Raqa from Ain Issa, the operation's main staging point. "The fighting continues; morale is good and our fighters are determined that this offensive will succeed," she said.

The fighting has prompted a steady trickle of civilians to flee IS territory, most heading towards Ain Issa. "We were afraid of the planes, and we were afraid of the IS fighters," said 34-year-old Wazira Al-Jeely from the village of Al-Tuwaila.

"When the strikes started, we took off our burqas and said we're done with you, and we ran away."

Like in the battle for Mosul, the goal of the Raqa offensive is to surround and isolate the militants inside the city, before eventually mounting a street-to-street assault.

In both cases officials are warning of long and bloody battles ahead, with militants expected to put up fierce resistance and use trapped civilians as human shields.

More than a million people are believed to be in Mosul. Raqa in 2011 had a pre-war population of some 240,000, and more than 80,000 people have since fled there from other parts of Syria.

Iraqi forces scored another victory against IS on Monday by establishing full control over Hamam al-Alil, about 15 kilometres (nine miles) from the edge of Mosul and the last town of note on the way to the city from the south.

They said a mass grave was found at an agricultural college in the area, with the offensive's Joint Operations Command saying "100 bodies of citizens with their heads cut off" had been uncovered.

An AFP journalist on Tuesday said body parts and bones were visible among rubbish dumped there.

Men in Iraqi security forces uniforms used ropes to pull two bodies, one headless, from the grave, and also removed a decapitated head. "Today, the team conducted an initial examination," said Mohammed Taher al-Tamimi, an Iraqi cabinet official.

Tamimi said the victims had been blindfolded with their hands and feet bound.

He said around 25 bodies were initially visible, but investigators believed there "very large numbers" of corpses there.

IS's rule has been marked by atrocities including mass beheadings and other executions that it has documented in photos and videos that its supporters share online.

The United Nations said Tuesday that IS fighters forced thousands of civilians to retreat with them from Hamam al-Alil.

UN rights office spokeswoman Ravina Shamdasani told reporters in Geneva the agency had received reports that the militants "forcibly moved about 1,500 families from Hamam al-Alil town to Mosul airport" on November 4.

The UN has warned for weeks that IS is making civilians living in districts around Mosul move into the city.