As Iraqi forces close in on the western city of Ramadi, thousands of civilians are effectively being held hostage inside by Islamic State militants who want to use them as human shields.

Iraqi forces cut the hardline group's last supply line into Ramadi in November, surrounding the city and making it almost impossible for the militants to send in reinforcements.

But for thousands of residents who remain trapped inside the mainly Sunni city, life has become even harder as the militants grow increasingly paranoid, residents said.

Reuters spoke to five residents inside the city and three who recently managed to get out. All said conditions inside had deteriorated to their worst since Islamic State overran it earlier this year.

"Daesh fighters are becoming more hostile and suspicious. They prevent us from leaving houses. Everyone who goes out against orders is caught and investigated," said Abu Ahmed. "We feel we're living inside a sealed casket."

Ramadi, a provincial capital in the fertile Euphrates valley just a short drive west of Baghdad, was Islamic State's biggest conquest since last year, and reversing it would be a major victory for the Iraqi government and its spectrum of allies that include both the United States and Iran.

The description of harsh rule by Islamic State fighters could also indicate disquiet among Sunni Muslim residents, some of whom switched sides to help US forces defeat a precursor of Islamic State in the city during the American occupation nearly a decade ago.

Sheikh Khatab al-Amir who is still in contact with members of his tribe inside Ramadi said the insurgents were restricting movement there.

"The insurgents have sectioned Ramadi into a group of smaller segments and do not permit the passage of civilians from one area to the other because they suspect anyone at the moment of being an informant for the security forces," he said.

More people were cooperating with the security forces as the insurgents' treatment became harsher, the sheikh said.

Residents say the militants have increased motorcycle patrols inside the city to catch those using mobile phones, which are banned in Islamic State territory. High, empty buildings are also under surveillance.

"They (militants) are strangling us more and more. They treat us like prisoners," said Abu Ahmed, speaking from the roof of his house to receive a weak phone signal with a cardboard box over his head so he would not be seen by Islamic State patrols.

"I have to go now. I'm hearing Daesh motorcycles. I could lose my head if..." said Abu Ahmed said, ending the call mid-sentence.

Food supplies used to enter the city from the west, but since Iraqi forces surrounded it, residents are subsisting on meagre rations of vegetables and a small quantity of flour distributed by the militants.

"We are eating old bread with rotten tomatoes," said another resident who preferred to be identified only by his first name, Omar, entreating God to rescue him and his family. "I feel I'll be forced to kill the cat we raised for years if there is nothing left to eat."

A shortage of cooking gas and kerosene has forced people to burn scraps of wood for fuel. Some said the militants had recently begun piling up branches and tree trunks in courtyards for families to use in cooking.

The militants used to provide fuel for neighbourhood electricity generators, but they no longer do, leaving residents without power for many hours.

"Daesh's ugly face has appeared at last. They are treating women like animals. I feel I was born again now. I feel I was a slave," said Um Mohammed, a physics teacher who fled Ramadi on Sunday with her elderly mother and is now in a temporary shelter south of Ramadi.

Scapegoat

Ramadi, the capital of Anbar province, fell to Islamic State in May, dealing the biggest blow in nearly a year to Iraqi government forces who had been fighting back after losing most of northern Iraq to the militants last year.

Prime Minister Haider al-Abadi vowed to retake the city within days, but the counter-offensive was delayed until Iraqi forces regrouped. That has also led to delays in government offensives in other areas further north.

Local officials and tribal leaders estimate between 1,200-1,700 families remain trapped inside Ramadi.

The government last week urged them to leave the city, but several residents told Reuters the militants were preventing them from doing so. Those caught trying to flee are detained by the fighters, and the head of the family risks being executed as a warning to others.

Some families managed to escape through a route controlled by the security forces on the city's southern outskirts before the militants deployed snipers to shoot anyone trying to reach the exit, residents and security sources said.

Ahmad al-Assafi who managed to flee in mid-November after paying $1,000 to a taxi driver who helped him to leave the city through connections with militants, said they appeared to be losing confidence as Iraqi forces close in.

"Daesh are mainly using motorcycles in their movements to avoid air strikes and have deployed suicide attackers in various parts of Ramadi. They look in real tension," he said,

Iraqi forces are making advances on the outskirts of the city, while denying that there are large numbers of innocent civilians still trapped in harm's way.

"We are pushing the terrorists more to the corners and our troops are further closing on them," said Sabah al-Numani, spokesman for the Iraqi counter-terrorism forces, which are deployed on the western part of Ramadi. "All families left inside Ramadi are those of the terrorists or those who support them."

Several residents said that although they longed to be rid of Islamic State, they feared they would be accused of supporting the militants if the city is recaptured.

"I wish that could happen soon to get rid of the Daesh nightmare, but what could happen afterwards could be worse," said Omar, a father of two daughters. "We will be the scapegoat."