Iraqi Prime Minister Haider al-Abadi vowed on Saturday to retaliate against the Islamic State group after it launched a chemical attack on a town near Kirkuk.

The suspected mustard gas attack on Taza that left a three-year-old girl dead "will not go unpunished", the premier said in a statement.

A large number of rockets were fired at Taza on Wednesday from the nearby village of Bashir, which is held by the jihadists.

Intelligence experts are still analysing samples, but local officials believe mustard agent was used in the attack on Taza, which lies just south of the city of Kirkuk and is around 220 kilometres (135 miles) north of Baghdad.

Abadi promised that medical support would be provided to the town, where hundreds of people were treated following the chemical attack.

Iranian Health Minister Hassan Hashemi said Saturday a medical team from the Islamic republic had arrived in Kirkuk after an "urgent request" from his Iraqi counterpart, Iran's ISNA news agency reported.

Hundreds of people attended the funeral on Friday of Fatima Samir, the girl who died of wounds suffered in the attack. Some of the mourners carried placards demanding protection.

The Iraqi air force carried out a strike on Bashir overnight and Abadi promised a ground operation to retake the village from IS soon, pro-government militia commander Abu Ridha al-Najjar said.

Bashir lies in an area that is officially under federal administration but is controlled by Kurdish forces that de facto expanded their autonomous region on the back of the jihadists' 2014 offensive.

Tension has been high between Kurdish forces and Shiite militias in the area, impeding military cooperation against IS.

In February, US Director of National Intelligence James Clapper and CIA Director John Brennan for the first time openly accused IS of using chemical weapons, including mustard gas, in Iraq and Syria.

Iraqi girl dies after IS chemical attack
Kirkuk, Iraq (AFP) March 11, 2016 - A three-year-old Iraqi girl wounded in a chemical attack by the Islamic State group died in hospital Friday, medical sources and officials said.

"She died of respiratory complications and kidney failure... caused by the mustard agent used by Daesh (IS) in Taza," said Masrour Aswad, of the Iraqi Commission for Human Rights.

Fatima Samir was among the dozens of people hospitalised after a chemical attack carried out Wednesday on Taza, a town just south of the city of Kirkuk.

Burhan Abdallah, the head of Kirkuk health directorate, said four people in serious condition were transferred to Baghdad.

Aswad said the rockets fired on Taza from the nearby IS-held town of Bashir contained mustard agent. Other security officials said chlorine may have been used.

Intelligence officials have collected samples that are still being analysed.

IS has used both chemical agents in the past, a tactic which has caused few casualties and whose impact so far has been more psychological than military.

Abu Ridha al-Najjar, a leader in the Turkmen branch of the Hashed al-Shaabi paramilitary umbrella group that includes Iraq's mostly Shiite militias, said the attack had sown fear.

"International NGOs should come to the region to see the effects of such shelling and its consequences on the civilian population, including after the attack," he said.

The Pentagon announced on Thursday that the US-led coalition against IS had carried out air strikes on the jihadist group's chemical weapons sites.

It said the targets were identified following the capture in Iraq last month of a man presented as the group's top chemical expert.

The coalition's spokesman, Colonel Steve Warren, said Friday that the use of chemical weapons by IS was a concern but he also downplayed its importance.

"It's not a high threat... we're not losing too much sleep over it," he told reporters in a video call.