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Paul Wood in Jalula, eastern Iraq: ''There is growing panic... they think the jihadis are coming in''
The Iraqi army says it has driven off Islamist-led militants attacking the country's biggest oil refinery amid reports that most of it is in militant hands.
An official told Reuters the militants had occupied 75% of the Baiji refinery, 210km (130 miles) north of Baghdad.
The army said 40 attackers had been killed, a claim which could not be verified independently.
Government forces have renewed air strikes on militants elsewhere.
Fighting is also reported in the western city of Ramadi.
The government is battling to push back ISIS (Islamic State in Iraq and the Levant) and its Sunni Muslim allies in Diyala and Salahuddin provinces, after the militants overran the second city, Mosul, last week.
Prime Minister Nouri al-Maliki has gone on television to tell Iraqis that gains by ISIS are a "setback" but Iraq has recovered its "national unity". He has long been accused of favouring the country's Shia Muslim majority.
In other developments:
- Turkey is investigating reports that 15 Turkish builders were abducted by ISIS on Tuesday; 80 Turks were abducted in Mosul last week
- US President Barack Obama is to brief top congressional leaders on Iraq while in the UK, Prime Minister David Cameron will hold talks with his senior security advisers
You can watch a BBC News special on the situation in Iraq on the BBC News Channel in the UK and BBC World internationally at 16:00 BST (15:00 GMT) today and follow our online live coverage.
Militants 'in control'The attack on the refinery started at 04:00 (01:00 GMT) from outside two of the three main entrances to the refinery, according to Reuters.
Smoke rose from a spare parts warehouse and some stores of oil were reportedly destroyed.
"The militants have managed to break into the refinery," the unnamed official told Reuters from inside the refinery. "Now they are in control of the production units, administration building and four watch towers. This is 75% of the refinery."
Army spokesman Qasim Ata said in news conference broadcast live on TV: "The security forces thwarted an attempt by Daish [ISIS] to attack Baiji refinery and 40 terrorists were killed."
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Stories from inside Iraq refugee camp
The nearby town of Baiji was overrun by ISIS-led militants last week. Foreign personnel were evacuated from the refinery earlier but local staff reportedly remained in place.
Baiji accounts for a little more than a quarter of the country's entire refining capacity, all of which goes toward domestic consumption for things like petrol, cooking oil and fuel for power stations, an official told AP news agency.
Hundreds of people have been killed since the start of the militant offensive last week, many of them believed to be captured soldiers publicly shot by ISIS-led firing squads.
During fighting in the city of Baquba this week, 44 prisoners were killed inside a police station in unclear circumstances.
'A setback'Militants in the western province of Anbar said they had made advances, with a number of police stations near the town of Hit going over to dissident tribes.
Further north, the Iraqi government said it had recaptured the citadel in the strategic town of Tal Afar, where militants were said to have taken control on Monday.
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Iraqi PM Nouri al-Maliki: "We will deal with those who think that they can defeat the political process"
"I would like to say once again that what has happened in Iraq is a setback but not every setback is a defeat," Mr Maliki said on Wednesday.
"This setback has allowed Iraq to recover its national unity and Iraqis have managed to recover their feeling that they are in danger and that not a single Iraqi will benefit from this crisis."
Iranian President Hassan Rouhani has said Tehran will not "spare any effort" to defend Shia holy shrines in Iraq against "mercenaries, murderers and terrorists".
He was speaking amid reports that the head of the elite Quds Force of the Iranian Revolutionary Guards, Qasem Soleimani, was in Baghdad to help co-ordinate the fight against the militants.
ISIS in IraqISIS grew out of an al-Qaeda-linked organisation in Iraq
- Estimated 10,000 fighters in Iraq and Syria
- Joined in its offensives by other Sunni militant groups, including Saddam-era officers and soldiers, and disaffected Sunni tribal fighters
- Exploits standoff between Iraqi government and the minority Sunni Arab community, which complains that Shia Prime Minister Nouri Maliki is monopolising power
- ISIS led by Abu Bakr al-Baghdadi, obscure figure regarded as a battlefield commander and tactician
Iraq 'massacre' photos: What we know
Are you in Iraq or do you have family there? Have you been affected by recent events? You can send us your experiences by emailing haveyoursay@bbc.co.uk using the subject line "Iraq".
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