Iraq has lost the city of Fallujah to al-Qaeda insurgents, following the worst fighting in the area in years.
US forces battled insurgents to take the Anbar province city in 2004, but now it is back in the hands of the same group after 65 people were killed in some of the bloodiest fighting seen in the region.
A senior security official said on Saturday eight soldiers, two government-allied tribesmen, and 55 militants from the Islamic State of Iraq and the Levant (ISIL) were killed in the fighting that later spread to Fallujah.
The group also has a presence in Syria where it has imposed an extreme version of Islamic law in the areas under its control, where kidnappings and killings of anyone who objects to their rule is commonplace.
The head of the police force in Anbar province said the police left the center of the city of Fallujah altogether and positioned itself on the outskirts.
"The walls of the city are in the hands of the police force, but the people of Fallujah are the prisoners of ISIL," Hadi Razeij said, speaking to the network al-Arabiya.
Fallujah and the capital of Anbar province, Ramadi, was a stronghold of Sunni insurgents during the Iraq War. Now Sunni Arabs complain that they are being marginalized, and public protests have erupted since late 2012.
Al-Qaeda militants overtook both cities and have been fighting government attempts to take them back.
Prime Minister Nouri al-Maliki said government forces would continue their efforts to rid the province of militants:
"There will be no retreat until we eliminate this gang and rid the people of Anbar of their evil acts. The people of Anbar asked the government for help, they called us to come to rescue them from terrorists."According to The Associated Press families are fleeing Fallujah and taking shelter at schools in nearby towns.
The city is suffering from shortages of gasoline and food prices have gone through the roof as supplies are no longer able to reach its markets.
It was reported that hundreds of ISIL fighters were inside Fallujah with heavy machine guns, rocket-propelled grenades, and mortars.
On Saturday, Sunni groups trying to take the city back had yet to be successful.
The US State Department expressed concern over the developments in Fallujah, saying it would work with Iraqi authorities in their efforts to regain control of the city.
Fallujah was the site where four American contractors were dragged out of their cars, and their bodies burned by insurgents in 2004. The dead men's mutilated bodies were later hung from a bridge by the terrorists.