An al Qaeda splinter group seized control of the Iraqi city of Mosul putting security forces to flight in a spectacular show of strength against the Shia-led Iraqi government.
The capture of the northern city of 2 million by the Islamic State of Iraq and the Levant - Sunni Muslims waging sectarian war on both sides of the Iraqi-Syrian frontier – strengthens ISIL's grip on key western towns and followed four days of heavy fighting in Mosul and the border province of Nineveh around it.
The United States, which pulled out its troops two and a half years ago, pledged to help Iraqi leaders "push back against this aggression" as the government of Prime Minister Nuri al-Maliki asked parliament to declare a state of emergency that would give him extraordinary powers to tackle the crisis.
But the battle, for the time being, seemed to be over. Some police were discarding uniforms and weapons and fleeing a city where the black flag of ISIL now flew over government buildings.
"We have lost Mosul this morning," said a colonel at a local military command centre. "Army and police forces left their positions and ISIL terrorists are in full control.
"It's a total collapse of the security forces."
A Reuters reporter saw the bodies of soldiers and policemen, some of them mutilated, littering the streets.
"We can't beat them. We can't," one officer told Reuters."They are well trained in street fighting and we're not. We need a whole army to drive them out of Mosul.
"They're like ghosts: they appear, strike and disappear in seconds."
The fall of Mosul, a largely Sunni Arab city after years of ethnic and sectarian fighting, deals a serious blow to Baghdad's efforts to fight Sunni militants who have regained ground and momentum in Iraq over the past year, taking Fallujah and parts of Ramadi in the desert west of Baghdad at the start of the year.
Control there, in Anbar province, as well as around Mosul in the north, would help ISIL and its allies consolidate control along the barely populated frontier with Syria, where they are fighting President Bashar al-Assad, an ally of Shia Iran.
A White House spokesman renewed US calls for Mr al-Maliki to do more to address grievances among Iraqis, notably the once dominant Sunni minority.
Many Sunnis feel disenfranchised and some have made common cause with foreign Islamist radicals, first against the U.S. troops that overthrew Sunni dictator Saddam Hussein in 2003 and now Shia-led Iraqi forces.
Thousands of families were fleeing north from Mosul, one of the great historic cities of the Middle East, towards the nearby Kurdistan region, where Iraq's ethnic Kurds have autonomy and their own large and disciplined military force, the Peshmerga.
"Mosul now is like hell. It's in flames and death is everywhere," said Amina Ibrahim, who was leaving with her children. Her husband had been killed last year, in a bombing.
In a statement, the US State Department said it was "deeply concerned" and had senior officials in Baghdad and Washington monitoring events in coordination with the Iraqi government, Kurdish officials and other Iraqi figures.
It said Washington would "support a strong, coordinated response".
"The United States will provide all appropriate assistance to the government of Iraq," it added, saying that its use of arms and fighters from Syria showed "ISIL is not only a threat to the stability of Iraq, but a threat to the entire region".
UN Chief Ban ki-Moon has also said he is "gravely concerned" by the serious deterioration of the situation in Mosul.