Iraqi forces have retaken control of most of the strategic northern town of Baiji from the Islamic State jihadist group, army officers said on Friday.

Government troops now hold "more than 70 percent" of the town -- including neighbourhoods in the south, east and north -- and are battling to capture the rest, a senior officer told AFP.

An army brigadier general also said that "major progress" has been made in Baiji, and that the Iraqi flag has been raised over important buildings including the police headquarters.

Iraqi forces entered the town, which had been under the control of IS for months, on October 31 after fighting their way up from the south.

Baiji lies on the main highway to Iraq's IS-controlled second city Mosul, and the town's recapture would also help to further isolate militants in the city of Tikrit, to the south.

The Baiji assault could also open the way to breaking a months-old jihadist siege of government forces defending Iraq's largest oil refinery, which is located near the town.