Iraq's Prime Minister Nouri al-Maliki has asked parliament to declare a state of emergency, after a radical Al Qaeda offshoot seized control of the country's second city on Monday night.
Islamists from the Islamic State of Iraq and the Levant (ISIS) captured Mosul, in northern Nineveh Province, prompting some 150,000 panic-stricken refugees to flee to the nearby autonomous Kurdish region in northern Iraq, to escape the notoriously-brutal ISIS.
ISIS took over several jails and freed thousands of inmates, as well as the city's airport - together with several military aircraft.
The Kurdish Regional Government's Prime Minister, Nechirvan Barzani, slammed the Iraqi government's inadequacy in dealing with the growing threat from ISIS, and pledged that the Kurdish Peshmerga militia would succeed in fending off any threat.
"Unfortunately, due to the failure of the Iraqi Security Forces to protect the people and the city of Mosul, the militant group referred to as the Islamic State of Iraq and al-Sham (ISIS) controls the city of Mosul," he lamented. "The people of Mosul fear for their lives because of attacks and the lack of food and services, and they are leaving their city...
"In order to assist and support the displaced people of the city of Mosul, including all of the city's different ethnic groups – Kurds, Arabs, Turkmen, Chaldeans and Assyrians – I ask the people of the Kurdistan Region to help the displaced people of Mosul in whatever way they can within the framework of legal and security guidelines. I also urge the United Nations High Commission for Refugees (UNHCR) to provide relief and support for the displaced people fleeing the violence in Mosul.
"In the meantime, we reassure the people living in the areas of Kurdistan outside KRG administration that Kurdish Security Forces and Peshmerga are ready, as always, to handle the security situation in these areas."
For his part, Maliki said that security forces have been placed on "maximum alert," and vowed to root-out the "terrorists" - but that seems unlikely given the failure of the Iraqi army to defend the city even after reinforcements were sent.
Pictures and video footage on social media posted by gleeful ISIS supporters show how soldiers abandoned their uniforms and equipment in a bid to avoid capture and probable death at the hands of ISIS.
Even more alarmingly, other images show US-made humvees and other armored vehicles and equipment seized by ISIS - with evidence emerging that at least some of it has already been sent to Syria - where ISIS is involved in a three-pronged war against other rebels, Kurdish militias and regime forces, as it extends its "Islamic state" from western Iraq through northern Syria.
ISIS 'getting stronger and stronger'
Led by Iraqi-born Abu Bakr al-Baghdadi, ISIS started as the Islamic State of Iraq, Al Qaeda's official affiliate in that country. But the ambitious al-Baghdadi has since fallen out of favor with Al Qaeda's leadership, headed by Osama bin Laden's former deputy Ayman al-Zawahiri, when he entered the fray in Syria independent of Al Qaeda's official Syrian branch (the Nusra Front), and then publicly rejected Zawahiri's calls to withdraw.
Zawahiri also took issue with ISIS's overly-brutal methods of enforcing its control and Islamic law (Sharia) over areas under its control, which the Al Qaeda chief felt was serving to alienate grassroots support. Perhaps most notoriously, the group has taken to publicly crucifying execution victims.
Meanwhile, Iraqi parliament speaker Osama al-Nujaifi told journalists that "all of Nineveh province" had fallen to ISIS, and that the Islamists were now turning their attention south towards Salaheddin province, according to the BBC.
ISIS's continued expansion in Iraq will have wider consequences for the region as a whole; one of the key reasons for its success has been its ability to exploit local resources - including via extortion rings - to fund its ambitious Syrian campaign.
"What happened is a disaster by any standard," al-Nujaifi warned. "The presence of these terrorist groups in this vast province... threatens not just the security and the unity of Iraq, but the whole Middle East."
Aymenn Al-Tamimi, an expert on Syrian affairs and Fellow of the Middle East Forum, agrees.
"If it turns out ISIS have taken exclusive control without sharing with other groups then this is very significant. It means massive expansion of power and resources... so in short, they are just getting stronger and stronger.