Kurdish forces taking part in the offensive to retake the Iraqi city of Mosul from Islamic State militants are besieging a key town to the north-east. Peshmerga fighters have surrounded Bashiqa, which lies on a crucial supply route 12km (8 miles) from Mosul, and are preparing to launch a full assault. But the threat of suicide bomb attacks means they are advancing with caution. A Counter-Terrorism Service commander also said its troops had gained ground around Bartella, 10km to the south. Abdul Wahhab al-Saadi told the BBC they had stormed the villages of Khazna, Khazna Tabba and Tob Zawa. The operation to retake Bashiqa is the second launched by the Peshmerga. Last week, they had to pull back after fierce clashes with IS militants dug in there. The second assault began on Sunday, and by Monday morning the Peshmerga had encircled the town and begun digging trenches in preparation to storm it, a commander told Kurdish news agency Rudaw. The BBC's Richard Galpin in Irbil says that if they do succeed in retaking Bashiqa, it would give the Peshmerga a clear run to north-eastern Mosul, with no other towns or villages lying in between. Iraq's Prime Minister Haider al-Abadi meanwhile insisted that claims that Turkish troops had taken part in the battle for Bashiqa were "baseless and untrue". Turkey's Prime Minister Binali Yildirim said on Sunday that soldiers stationed at a nearby base, where they have been training Peshmerga and Sunni Arab tribal fighters, had provided "support with artillery, tanks and howitzers". Journalists on the front line have reported seeing artillery fire coming from the Turkish base and hitting IS positions on several occasions. Informants 'executed by IS' About 30,000 Iraqi security forces, Kurdish Peshmerga fighters, Sunni Arab tribesmen and Shia militiamen, assisted by US-led coalition warplanes and military advisers, launched the long-awaited offensive to retake Mosul a week ago. On Monday, US special presidential envoy to the coalition Brett McGurk declared that they had met all their objectives thus far, and that the coalition had carried out more air strikes than during any other seven-day period of the war against IS. A senior intelligence officer told the BBC that IS had begun executing suspected informants as Iraqi forces pushed closer to Mosul. The officer also said IS had positioned some civilians as human shields, describing this as a sign of weakness and desperation. As the pressure increases on Mosul, IS has been carrying out more attacks in other parts of Iraq. After a major assault on the northern city of Kirkuk last week in which up to 100 people were killed, militants attacked the western town of Rutba on Sunday and overran several districts. On Monday, a police source reported continuing clashes between troops and IS militants inside Rutba despite the arrival of military reinforcements. And a local official in Sinjar told Reuters news agency that at least 15 militants had been killed in two hours of fighting with Peshmerga fighters. Our correspondent says these diversionary tactics seem to be working. According to a Kurdish intelligence source, he adds, some 2,000 Peshmerga troops had to be pulled away from the Mosul offensive to deal with the attack on Kirkuk. The UN refugee agency also announced on Monday that it would soon have enough shelters for 150,000 people who might flee Mosul and its surrounding area during the offensive. Some 7,500 people had already left, it said.