Iraqi Prime Minister Haider al-Abadi held talks in Baghdad with America's top military officer Sunday, discussing plans to oust the Islamic State group from second city Mosul, his office said.

Washington is leading an international coalition that is carrying out air strikes against IS as well as providing training, advice and other support to Iraqi forces.

Abadi and General Joseph Dunford, chairman of the Joint Chiefs of Staff, discussed boosting "cooperation between the two countries in the fields of training and arming, ongoing international coalition support for Iraq... and plans to liberate Mosul," a statement said.

Iraqi forces are conducting operations to set the stage for an assault on Mosul, which has been held by IS since June 2014, but the final push to retake it is likely still months away.

Defence Minister Khalid al-Obeidi has said that IS leaders and their families have sold their belongings and fled the city as Iraqi forces close in.

Mosul is the last city held by IS in Iraq, but retaking it poses a major challenge, and the operation could unleash a humanitarian crisis unless plans are made for people who would likely flee the fighting.

The Red Cross has said it believes that up to a million Iraqis could be displaced in the coming months by fighting against IS, including the operation to recapture Mosul.

IS overran large areas north and west of Baghdad in 2014, but has since lost significant ground to Iraqi forces.