Militants from the ultra-violent Islamic State group have seized Iraq's largest dam, putting them in control of the water and electricity supply for Iraq's second city of Mosul.

The jihadist group (formerly known as Isis) seized the dam, which lies on the Tigris river, on Thursday.

"Mosul dam has been in insurgent hands since last night," a spokesman for the Kurdish peshmerga forces said on Friday.

The capture was confirmed by the US State Department and the head of Iraq's provincial council of Nineveh, Agence France Press reported.

The dam provides electricity to Mosul's 1.7 million inhabitants and its capture marks a catastrophe for the Kurdish forces that had fought for control of the facility.

Controlling the dam means the jihadists can tamper with the water and energy supply for Mosul city, which they captured from central government forces in June.

The group has previously manipulated water to attack its enemies in the western Iraqi province of Anbar.

"Isis already uses water as a weapon. It has previously stopped the water flow and dried the river course from Fallujah and downstream," an Iraqi energy expert told IBTimes UK.

US Intervention

US President Barack Obama has paved the way for US airstrikes, warning that he would support the use of force to halt the Islamic State's advance across northern Iraq.

"Today America is coming to help," Obama said in a televised speech on Thursday.

Obama said the US would intervene if the Islamic State threatened US interests or targeted religious minorities, but ruled out deploying troops to the country.