Shiite militias converged on Ramadi Monday to try to recapture it from jihadists who dealt the Iraqi government a stinging blow by overrunning the city in a deadly three-day blitz.

The loss of the capital of Iraq's largest province was Baghdad's worst military setback since it started clawing back territory from the Islamic State (IS) group late last year.

Washington, which had made Anbar -- of which Ramadi is the capital -- a cornerstone of its assistance to Baghdad against IS, admitted to a "setback".

Prime Minister Haider al-Abadi had been reluctant to deploy Shiite militias to Anbar province for fear of alienating its overwhelmingly Sunni Arab population.

He favoured developing locally recruited forces, with support from the United States.

But militia commanders said Monday Ramadi's fall had shown the government could not do without the Popular Mobilisation units (Hashed al-Shaabi).

Badr militia chief Hadi al-Ameri, a senior figure in the Hashed who has been critical of the government's policies in Anbar, went to Habbaniyah, near Ramadi, Monday to discuss operations.

With the huge numbers and battle experience of the paramilitary groups, a counter-offensive was expected to start soon, before IS has time to build up its defences.

Abadi "ordered the setting up of new defence lines in Ramadi, to reorganise and deploy the fighting troops to face" the jihadists, his office said after he met Iran's visiting defence minister, Hossein Dehghan.

Various militias announced they had units already in Anbar -- including around Fallujah and Habbaniyah -- ready to close in on Ramadi.

- Massive reinforcements -

A spokesman for Ketaeb Hezbollah, a leading Shiite paramilitary group, said it had units ready to join the Ramadi front from three directions.

"Tomorrow, God willing, these reinforcements will continue towards Anbar and Ramadi and the start of operations to cleanse the areas recently captured by Daesh will be announced," Jaafar al-Husseini told AFP, using an Arabic acronym for IS.

Asaib Ahl al-Haq, a group routinely accused of abuses, said it had more than 3,000 fighters waiting for a green light.

The fall of Ramadi, some 100 kilometres (60 miles) west of Baghdad, came when beleaguered security forces pulled out of their last bases on Sunday.

The jihadists used waves of suicide bomb attacks involving cars, trucks and bulldozers to thrust into government-controlled neighbourhoods on Thursday and Friday.

The black IS flag was soon flying over the provincial headquarters and, with reinforcements slow to come, thousands of families fled.

Anbar officials said at least 500 people died in three days.

Tensions between Tehran and Washington, Baghdad's two main foreign partners, also played out during the battle for executed dictator Saddam Hussein's hometown of Tikrit, which the government took back last month.

Hashed involvement was key in the recapture of Tikrit, but analysts had always warned Anbar would be a bigger task.

"Right now we're dealing with the Sunni heartland... where the Sunni community has not completely rejected IS," Ayham Kamel, director for the Middle East and North Africa at the Eurasia Group, said.

"It is not necessarily approval of IS, it could be fear or hedging, but they are not rising against IS," he said.

IS on Monday released a video of celebrations in Mosul, Iraq's second city and whose liberation from the jihadists now looks an ever more distant prospect.

- Palmyra rocket fire -

In the Syrian half of the "caliphate" IS supremo Abu Bakr al-Baghdadi proclaimed last year, jihadist fighters nearly notched up another high-profile victory.

Government forces on Sunday repelled an IS advance on the ancient oasis town of Palmyra that had sparked concern that another jewel of the Middle East's architectural heritage could be destroyed by the jihadists.

"IS's attack was foiled," provincial governor Talal Barazi said Sunday after troops ousted the jihadists from the northern part of the town which they seized on Saturday.

But the jihadists remained on the outskirts and fired a barrage of rockets into the town late Sunday, killing at least five civilians including two children, the Syrian Observatory for Human Rights said.

Syrian antiquities director Mamoun Abdulkarim said two rockets struck the garden of Palmyra's museum but caused no damage to its priceless collection of statues, sarcophagi and other artefacts.

UNESCO has urged both sides to spare Palmyra, which it describes as one of the most important cultural centres of the ancient world.

On Monday, IS seized the Al-Hail and Arak gas fields northeast of Palmyra, vital to the regime for generating electricity for areas it controls, the Observatory said.

US says situation in Ramadi 'contested' after IS claims takeover
Washington (AFP) May 18, 2015 - The Pentagon said Sunday the situation in Ramadi, which IS militants claim to have seized from Iraqi forces, remains "fluid and contested" and it is following reports of continued violence in the strategic city.

"We're continuing to monitor reports of tough fighting in Ramadi and the situation remains fluid and contested," Pentagon spokeswoman Maureen Schumann told AFP in a statement.

"It is too early to make definitive statements about the situation on the ground there at this time," she added.

The Islamic State group said earlier Sunday it had taken full control of the Iraqi city after a bloody assault, in a statement posted on jihadist Internet forums.

After the claim, Iraqi Prime Minister Haider al-Abadi ordered government forces to "hold their positions" in Ramadi, capital of Iraq's largest province of Anbar.

He called on troops, tribesmen and other elite forces to push the Islamic State militants out of the city.

Pentagon spokeswoman Elissa Smith told AFP said the flashpoint city has long been fought over and that the Islamic State group appeared to be gaining ground in the latest bout of fighting.

"Ramadi has been contested since last summer and ISIL now has the advantage. We have always known the fight would be long and difficult, particularly in Anbar," Smith told AFP.

"We continue to support with air power and advice to the Iraqi forces," Smith added.

- 'Propaganda boost' -

The United States warned two months ago that Ramadi could fall, said Smith, adding that losing the city now does not mean it will remain in IS hands.

"The loss of Ramadi does not mean the tide of the campaign has turned, and we have long said that there would be ebbs and flows on the battlefield," she said, adding that taking the town would merely be a "propaganda boost" for the group.

"If lost, that just means the coalition will have to support Iraqi forces to take it back later."

Losing Ramadi, about 100 kilometers (60 miles) west of the capital, could be one of Baghdad's worst setbacks since it began a nationwide offensive last year to reclaim territory taken over by IS jihadists in June 2014.

Two days of violence in Ramadi has displaced at least 8,000 people, according to the International Organization for Migration.

A local spokesman said some 500 people, both civilians and military, have were killed in the jihadist offensive and Washington condemned the reports of violence against civilians.

"In the past days, ISIL has displayed trademark brutality as reports of murder of civilians," Smith said, using an alternate acronym for IS militants.