The Islamic State has allegedly used chemical weapons in an isolated clash with Kurdish militia fighters.

According to a report by the Daily Star, the Kurdistan Region Security Council accused the militant group of using chlorine gas canisters during an encounter between IS fighters and Peshmerga militiamen on January 23 near Mosul in northern Iraq.

The battle was an attempt by the Kurdish militia to interrupt a major ISIS supply line in the region.

According to the Daily Star, the Kurdish government provided a video that showed Peshmerga fighters firing into a truck that had smoke billowing at the rear. The truck then exploded and spread white smoke over the battlefield. 

An anonymous Kurdish official claimed that several fighters who were involved in the attack had to be treated for nausea, vomiting and "general weakness." The official said that an unspecified partner nation in the coalition found traces of chlorine after analysing clothing and soil samples from the battleground.

Militiamen also found 20 canisters in the destroyed truck, the Daily Star added.

The Kurdish government has released a statement condemning the Islamic State's use of chemical weapons.

"The fact ISIS relies on such tactics demonstrates it has lost the initiative and is resorting to desperate measures," the Kurdish government's statement said.

Chlorine was first used as a chemical weapon in the trenches of World War I, and has the effect of choking a victim to death. It was also used in Damascus in Syria in 2013 in an incident that afterwards prompted the United States to launch airstrikes against Syrian government forces in retaliation. Iraqi officials believe that the ISIS used chlorine gas canisters in late September of last year in a battle near the Iraqi towns of Balad and Duluiya.