"The Iraqis fell back 10 to 15 kilometres round Guwer overnight," one of the sources told AFP, asking not be identified. "The peshmerga advanced 10 to 15 kilometres.

"There was no fighting," the source acknowledged, although he added that he still considered that "this withdrawal is a defeat for the Iraqis."

Guwer itself was not yet under rebel control, the source admitted, adding that the nearby village of Hawera remained in government hands.

It was the second pullback by forces loyal to President Saddam Hussein around Mosul -- on Monday troops fell back from positions towards Dohuk to the north.

Government forces already staged similar withdrawals around the key northern oil city of Kirkuk to the east, although analysts said they regarded them as largely tactical.

SPACE.WIRE