Residents of the Iraqi capital, Baghdad, are stockpiling food and water as militants move closer.
Fighting between ISIS and the security forces, supported by Shia militias, has raged around the city of Baquba, only 60km (35 miles) away from the capital.
Correspondents say that the capital is tense with the insurgents closing in from the north and from the west.
Iraqi forces have been engaged in heavy clashes with the rebels who have seized several key cities in the past week.
UK Prime Minister David Cameron will hold talks with his senior security advisers on Wednesday to discuss the crisis, warning that ISIS (Islamic State in Iraq and the Levant) represents “a real threat to our country”.
Strong language
Iraqi Prime Minister Nouri Maliki has fired senior officers for failing to halt the sweeping advance by Sunni Islamist rebels.
In unusually strong language on Tuesday, he accused Saudi Arabia – which is largely Sunni – of backing ISIS.
With Shia areas of the capital bombed almost daily, correspondents say inhabitants of Baghdad have developed a siege mentality.
People with enough money have started to stockpile essential items of food, correspondents say, which has increased prices dramatically.
Four army commanders were dismissed because they did not perform “their national duty”, a government statement said.
Maliki and other senior figures of his Shia government were joined by Sunni leaders in a call for “national unity”, after talks in Baghdad.
They urged Iraqis to avoid sectarian grievances and said individuals with no official state function were banned from carrying weapons.
The militants, led by the ISIS, took control of the northern cities of Mosul and Tikrit in a rapid advance last week, and Tal Afar on Monday.
They also briefly captured parts of Baquba before government troops and allied Shia militia pushed them back on Tuesday.
Qasem Suleimani, the commander of an elite unit of Iran’s revolutionary guards, is reported to be in Baghdad, helping military and Shia leaders co-ordinate their campaign against the rebels.
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