Islamist militants moved into two new towns in the east of Iraqi overnight, taking control of Saadiyah and Jalawla after Iraqi security forces abandoned their posts.
Security forces said the two towns in the eastern province of Diyala had fallen to the ISIS fighters, along with several villages nearby near the Himreen mountains.
President Obama is considering military strikes to halt their advance towards Baghdad.
The Iraqi army fired at Saadiya and Jalawla from the nearby town of Muqdadiya, causing families to flee towards the Iranian border, security sources said.
The Foreign Secretary has been clear on the threat of Isis, but he has ruled out the prospect of any UK military involvement in the crisis.
Iraq’s foreign minister, Hoshyar Zebari, is a natural diplomat. Polite, immaculately dressed, and blessed with a great memory.
Isis has paraded military equipment in Mosul it captured from when the Iraqi army fled in what some see as a "nightmare scenario."