Children fleeing Mosul have arrived in camps too terrified to speak, according to aid workers on Wednesday.

More than two years under ISIS occupation followed by intense dangers while fleeing, such as landmines, snipers and fighters, has taken a toll on children's physical and mental health, World Vision staff said in Northern Iraq.

More than 20,000 people have already been displaced fleeing Mosul and up to 700,000 more could leave the city which has been under ISIS control since June 2014. Many will head to camps around the city struggling to cope with the influx of more refugees.

"Many children have been stuck in their homes while bombings, sniper fire or chaos rules around them. Others have witnessed the death of family members," said Aaron Moore, World Vision's programs manager in Northern Iraq.

"We are working with children who have arrived from Mosul in the last few days that are showing the crushing impact of being trapped in a city that was taken over two years ago."

The few children who have made it to camps are deeply traumatised and unable to communicate properly.

"In the camps, many children don't want to play," Moore said. "When painting, they have been recreating war scenes with tanks and war planes."

The campaign to retake Mosul is led by Iraqi troops with the backing of US airstrikes. Local militia secured a foothold in the city on Wednesday and are reported to be moving forward slowly for fear of ambushes, booby traps and landmines.

A spokesman for the Norwegian Refugee Council warned the lives of 1.2 million civilians are in "grave danger".

World Vision joined several other NGOs in urging for a safe passage out of Mosul for all civilians.

"Humane treatment by all parties at every stage of the Mosul operation must be a priority," a statement read on Wednesday.