The region, which had enjoyed unprecedented autonomy for years, has been in turmoil since the independence referendum a month ago prompted military and economic retaliation from Iraq’s central government in Baghdad.
Kurdish Peshmerga forces withdrew from the town, located on the Zab river, after battling the advancing Iraqi troops with machine guns and mortars.
Older generations of Iraq’s Kurds suffered during Hussien’s Anfal campaign, and want to see their struggle for national independence come to fruition.
In a setback for the Iraqi government and western powers who pushed for dialogue, the plebiscite will go ahead as planned, later this month.
It is the largest group of foreigners linked to ISIS to be held by Iraqi forces since they began driving the militants from Mosul and other areas in northern Iraq last year, an aid official said.
Dozens of displaced residents are returning to Mosul after the nine-month battle to recapture ISIS’s Iraqi stronghold, but devastation and jihadist threats remain.