Iraq's Shi'ite paramilitaries announced on Tuesday they had taken charge of the campaign to drive Islamic State from the western province of Anbar, giving the operation an openly sectarian codename that could infuriate its Sunni population.

The Iraqi government is scrambling to reverse its biggest military setback in nearly a year, the fall of Ramadi, capital of Anbar province west of Baghdad. Prime Minister Haidar Abadi has vowed to recapture it within days.

Ramadi's fall a week ago was swiftly followed by the fall of the city of Palmyra in Syria, the two biggest gains by Islamic State fighters since the United States began targeting them with air strikes in both Iraq and Syria last year.

Islamic State controls swathes of territory in both countries, where it has proclaimed a caliphate to rule over all Muslims according to strict mediaeval precepts.

The simultaneous advances over the past week at opposite ends of the group's territory have raised doubts about the US strategy to bomb the militants from the air but leave fighting on the ground to local Iraqi and Syrian forces.

In Iraq, the regular military's failure to hold Ramadi has forced the government to send Iran-backed Shi'ite paramilitaries to help retake the city. Washington is worried this could enrage residents in the overwhelmingly Sunni province and push them into the arms of Islamic State.

A spokesman for the Shi'ite militias, known as Hashid Shaabi, said the codename for the new operation would be "Labaik ya Hussein", a slogan in honour of a grandson of the Prophet Mohammed killed in the 7th Century battle that spawned the schism between Shi'ite and Sunni Muslims.

"The Labaik Ya Hussein operation is led by the Hashid Shaabi in cooperation and coordination with the armed forces there," Assadi said at a televised news conference. "We believe that liberating Ramadi will not take long."

ALIENATION

The militia fighters have performed better on the battlefield than Iraq's own army, but their presence risks alienating the Sunni residents of the area, especially if they emphasise sectarian aims.

Washington hopes Iraq's Shi'ite-led government can win the support of Sunni tribal fighters, the tactic U.S. Marines used inAnbar to defeat Islamic State's al Qaeda predecessors during the deadliest phase of the 2003-2011 U.S. occupation of Iraq.

Any increase in sectarian rage plays into the hands of Islamic State, which promotes itself as the only force capable of protecting Sunnis from Shi'ite aggression, considers all Shi'ites to be heretics who must repent or die, and seeks to provoke a wider sectarian battle to hasten the apocalypse.

The Baghdad government has succeeded in persuading some Sunni tribal leaders to accept help from the Shi'ite fighters, but mistrust runs deep after years of sectarian war in which atrocities were committed on both sides.

Iraqi government forces and the Shi'ite militia have been pushing back towards Ramadi since Saturday in the Euphrates river valley west of Baghdad.

President Barack Obama, who won office in 2008 on a campaign pledge to withdraw US troops from Iraq, has ruled out sending ground forces to fight against Islamic State.

Instead, Iran has filled the vacuum, providing aid and leadership to the Hashid Shaabi Shi'ite militia forces.

The commander of the Quds Force of Iran's Revolutionary Guards, the main Iranian force backing its allies abroad, mocked Washington for doing too little to aid Baghdad.

"Obama has not done a damn thing so far to confront Daesh. Doesn't that show that there is no will in America to confront it?" Qassem Soleimani, said, using an Arabic acronym for Islamic State.

"How is it that America claims to be protecting the Iraqi government, when a few kilometres away in Ramadi killings and war crimes are taking place and they are doing nothing?" said the Iranian general, who was spotted in recent weeks on the battlefield helping to lead the Iraqi Shi'ite militia.

Soleimani's remarks came a day after US Defense Secretary Ash Carter infuriated Baghdad by saying the Iraqi army had abandoned Ramadi because it lacked "the will to fight", remarks Iraqi Prime Minister Abadi said showed Carter was misinformed.

In a move of apparent damage control after Carter's comments, Vice President Joe Biden phoned Abadi on Monday to reassure him that Washington still supported Baghdad.

Although Washington backs the government in Iraq, it is opposed to Islamic State's other main enemy, the Syrian government of President Bashar al-Assad, a position which makes forging a united alliance against the militants difficult.

Assad, an Iranian ally, is fighting a range of mainly Sunni insurgent groups in a four-year-old civil war that has killed more than a quarter of a million people and made eight million homeless. His government has lost ground in recent months to Islamic State and other Sunni groups, including a local branch of al Qaeda and groups that have Western and Arab support.

On Monday the Syrian air force pounded Palmyra, some 240 km (150 miles) northeast of the capital, in a bid to dislodge Islamic State fighters who seized it last week. The city of 50,000 people is also home to some of the world's oldest and best-preserved ancient Roman ruins.

Islamic State boasts that its fighters carry out mass killings in towns and cities that they seize, and dynamite and bulldoze ancient monuments they consider evidence of paganism.

The Britain-based Syrian Observatory for Human Rights monitoring group says the fighters killed more than 200 people, including children, after capturing the city.

Syria's government-run satellite television stations were interrupted on Tuesday by what Damascus said was interference by its foreign enemies.