The development is not the first time that water has been used as a weapon in Mideast conflicts and in Iraq in particular.
Earlier this year, the Islamic State group reduced the flow through a lock outside the militant-held town of Fallujah, also in Anbar province. But the extremists soon reopened it after criticism from residents.
The battle for the dam followed the Islamic State's blitz across much of western and northern Iraq earlier last year, an advance that captured key Anbar cities and also Mosul, Iraq's second-largest city that lies to the north of Baghdad.
The Islamic State group also gained large swaths of land in neighboring Syria and proclaimed a self-styled caliphate on the territory it controls, imposing its harsh interpretation of Islamic law, or Sharia.
On Wednesday, IS militants closed the locks on a militant-held dam on the Euphrates River near Ramadi, reducing the flow downstream and threatening irrigation systems and water treatment plants in nearby areas controlled by troops and tribes opposed to the extremist group.
Anbar councilman, Taha Abdul-Ghani said the move will not only make the lives of people living in the affected areas more difficult but it could also pose a threat to the security forces fighting to recapture Ramadi.
"The militants might take advantage of that and attack troops deployed along the river" and the nearby Habaniya military base, Abdul-Ghani told The Associated Press.
The base has been used as a staging ground for Iraqi troops and allied Shiite militias in the fight against the militants in Ramadi and surrounding areas.
Thousands of people in government-held towns of Khalidiya and Habaniya are already suffering from shortages of drinking water because purification plants along the Euphrates have all but shut down because of already low water levels on account of the summer weather.
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