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Daesh group chief Abu Bakr Al Baghdadi is reported to have abandoned Mosul, leaving local commanders behind to lead the battle against Iraqi forces advancing in the city.
With Iraqi troops making steady progress in their assault to retake Mosul from the militants, a US defence official said Baghdadi had fled to avoid being trapped inside.
It was the latest sign that Daesh is feeling the pressure from twin US-backed offensives that have seen it lose much of the territory it once controlled in Iraq and Syria.
Speaking to reporters in Washington, the defence official said Baghdadi had left Mosul before Iraqi forces seized control of a key road at the beginning of this month, isolating the militants in the city.
"He was in Mosul at some point before the offensive.... He left before we isolated Mosul and Tal Afar," a town to the west, the official said.
"He probably gave broad strategic guidance and has left it to battlefield commanders."
The military said on Wednesday they had also taken the infamous Badush prison northwest of Mosul where Daesh reportedly executed hundreds of people and held captured Yazidi women.
On Thursday Iraqi forces were "combing the city centre area to defuse (bombs in) homes and shops and buildings," Lieutenant Colonel Abdulamir Al Mohammedawi of Iraq's elite Rapid Response Division said. Forces were also "searching for snipers in the city centre", Mohammedawi said.
The area is located on the edge of Mosul's Old City, a warren of narrow streets and closely spaced houses that could see some of the toughest fighting of the battle.
"Currently there is no order from the operations command to advance toward the Old City. We will advance when this order is issued," Mohammedawi said.
Hundreds of thousands of civilians are believed to still be trapped under Daesh rule in Mosul.
Those who did manage to escape the city said the militants were growing increasingly desperate.
Abdulrazzaq Ahmed, a 25-year-old civil servant, was seized by militants fighters as they retreated from the neighbourhood of Al Mansur.
"We were used as human shields" said Ahmed, who managed to escape along with hundreds of other civilians to Iraqi police waiting outside the city.
Rayan Mohammed, a frail 18-year-old who was once given 60 lashes for missing prayers, said the militants were scrambling in the face of the Iraqi offensive.
"They ran away like chickens," he said.
West Mosul is the most heavily populated area under Daesh control and along with Raqqa in Syria the last major urban centres it holds.
In Syria, a US-backed alliance of Kurdish and Arab fighters known as the Syrian Democratic Forces (SDF) has been advancing on Raqqa.
A US official said on Wednesday that a marine corps artillery battery had been sent into Syria to support the battle for Raqqa - joining some 500 American special operations fighters who have been training and assisting the SDF.
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