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imageMOSUL: Militants overran Iraq's second city of Mosul and a string of Sunni Arab northern towns on Tuesday in a spectacular blow against the goverment that Washington warned threatens the entire region.

Prime Minister Nuri al-Maliki asked parliament to declare a state of emergency and announced the government would arm citizens to fight the militants and their allies.

"All of Nineveh province fell into the hands of militants," parliament speaker Osama al-Nujaifi told journalists in Baghdad, adding the gunmen were heading south towards neighbouring Salaheddin province.

An army brigadier general told AFP hundreds of militants from the Islamic State of Iraq and the Levant (ISIL) launched a major assault on the security forces late on Monday.

An interior ministry official said Mosul, the scene of deadly clashes on Friday and Saturday, was "outside the control of the state and at the mercy of the militants".

Soldiers and police had stripped off their uniforms and fled, and the militants used loudspeakers to declare they had "come to liberate" the city of some two million people.

An AFP journalist, himself fleeing with his family, said shops were closed, a police station had been set ablaze and security forces vehicles had been burned or abandoned.

Hundreds of families were seen fleeing. Some were on foot, carrying what they could, others in vehicles with their belongings piled on the roofs.

In the Kurdish north, another AFP journalist said thousands of Mosul residents had fled for the safety of the autonomous region. Dozens of cars and trucks queued at a Kurdish checkpoint waiting to be allowed in.

"The army forces threw away their weapons, changed their clothes, abandoned their vehicles and left the city," said fleeing Mosul resident Mahmud Nuri.

"We didn't see anyone fire a shot". The militants seized the provincial government headquarters and the Nineveh Operations Command as well as the airport, the army general said.

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