Iraq says its forces preparing for Fallujah battle

"Your sons the heroic fighters in the armed forces are ready to achieve a new victory... they are going to the city of Fallujah to clear it from the Daish (IS) gang," Saad al-Hadithi said in a statement.

He did not say when an assault on the jihadist bastion, located in Anbar province just 50 kilometres (30 miles) west of Baghdad, would begin.

The announcement apparently settles the issue of which IS-held city Iraq should seek to retake next -- a subject of debate among Iraqi officials and international forces helping the country fight the jihadists.

Iraq's second city Mosul was the American military's recommended target, but powerful Iraqi militias may have helped force the issue by deploying reinforcements to the Fallujah area in preparation for an assault.

Karim al-Nuri, spokesman for Badr, one of the main Shiite militia forces, said the operation would start soon.

"Now everything is ready, and nothing remains except launching the operation," Nuri said.

Earlier Sunday, Iraq's Joint Operations Command warned civilians still in Fallujah -- estimated to number in the tens of thousands -- to leave the city.

It also said that families who cannot leave should raise a white flag over their location and stay away from IS headquarters and gatherings.

Officials said several dozen families had fled the city, but IS has sought to prevent civilians from leaving, and forces surrounding Fallujah have also been accused of preventing foodstuffs from entering.

Iraqi forces have in recent days been massing around the city, which has been out of government control since January 2014.

Anti-government fighters seized it after the army was withdrawn, and Fallujah later became one of IS's main strongholds.

Fallujah and Mosul, the capital of the northern province of Nineveh, are the last two major cities IS still holds in Iraq.

Fallujah is almost completely surrounded by Iraqi forces, who have regained significant ground in the Anbar province in recent months, including its capital Ramadi further up the Euphrates River valley.

American forces launched two major assaults on Fallujah in 2004 in which they saw some of their heaviest fighting since the Vietnam War.

Iraqi forces would have the advantage of greater knowledge of the area, especially if they employ pro-government Anbar tribal fighters in the battle.

But they lack the training and enormous firepower that American forces brought to the Fallujah battles.

IS overran large areas north and west of Baghdad in June 2014, and Iraqi forces performed dismally during the offensive despite significantly outnumbering the jihadists.

Baghdad's forces have since managed to regain significant ground from IS with the backing of US-led air strikes, training and other support.