IRAQI forces are planning an assault on the northern city of Mosul, hoping to retake it from Islamic State fighters, the spokesman for the country's counter-terrorism unit said yesterday.

"The new tactic of launching a quick attack shrouded by secrecy proved successful and we are determined to keep following the tactics with help of intelligence provided by Americans," spokesman Sabah Nouri said. "The next stop will be Mosul."

Meanwhile Kurdish officials will take part in negotiations on forming a new Iraqi government, the outgoing foreign minister said, signalling the possibility of improved ties with the central administration.

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Hoshiyar Zebari said a final decision on whether the Kurds will end their suspension of participation in the government will come later. Outgoing Prime Minister Nuri al-Maliki had been locked in disputes with the Kurds over budgets and oil.

Zebari said Kurdish forces had pushed out Islamic State fighters and recaptured Iraq's biggest dam with the support of US air strikes.