Washington deployed some 275 military personnel to protect its embassy in Baghdad, the first time it has sent troops to Iraq since it withdrew its forces at the end of 2011 after a bloody and costly intervention launched in 2003.
It was also mulling air strikes against the militants, who are led by the jihadist Islamic State of Iraq and the Levant (ISIL) but also include loyalists of now-executed Sunni Arab dictator Saddam Hussein.
The offensive has displaced hundreds of thousands of people and sent jitters through world oil markets as the militants have advanced ever nearer Baghdad leaving the Shiite-led government in disarray.
Officials said today that militants briefly held parts of the city of Baquba, just 60 kilometres from the capital.
They also took control of most of Tal Afar, a strategic Shiite-majority town between Mosul and the border with Syria, where ISIL also has fighters engaged in that country's three-year-old civil war.
In Tal Afar, militants controlled most of the town but pockets of resistance remained.
Soldiers, police and armed residents held on to parts of its airport, the deputy head of the provincial council, Nureddin Qabalan, said.
Further south, security personnel abandoned the Iraqi side of a key crossing on the border with Syria, officers said.
Syrian rebel groups opposed to ISIL, who already controlled the other side of the Al-Qaim crossing, advanced across the border to take over.
