Iraq militants scoff as US rains bombs on Islamist State fighters

US warplanes bombed Islamist State militants marching on Iraq's Kurdish capital on Friday, soon after President Barack Obama said on Thursday evening that Washington must act to prevent "genocide".

Islamic State fighters, who have beheaded and crucified captives in their drive to eradicate unbelievers, have advanced to within a half hour's drive of Erbil, the capital of Iraq's Kurdish region and a hub for US oil companies.

They have also seized control of Iraq's biggest dam, Kurdish authorities confirmed on Friday, which could allow them to flood cities and cut off vital water and electricity supplies.

The Pentagon said two F/A-18 aircraft from an aircraft carrier in the Gulf had dropped laser-guided 500-pound bombs on the fighters' artillery and other air strikes had targeted mortar positions and an Islamic State convoy.

Obama authorised the first US air strikes on Iraq since he pulled all troops out in 2011, arguing action was needed to halt the Islamist advance, protect Americans and safeguard hundreds of thousands of Christians and members of other religious minorities who have fled for their lives.

For the second straight night, the United States also dropped relief supplies to members of the ancient Yazidi sect, tens of thousands of whom are massed on a desert mountaintop seeking shelter from fighters who had ordered them to convert or die.

"Earlier this week, one Iraqi in the area cried to the world, 'There is no one coming to help'," said Obama in a late night television address to the nation on Thursday. "Well, today America is coming to help."

"We can act carefully and responsibly to prevent a potential act of genocide," he said. On Friday the White House said the strikes would last as long as the security situation required.

The Islamic State was defiant. A fighter told Reuters by telephone the US air strikes would have "no impact on us".

''The planes attack positions they think are strategic, but this is not how we operate. We are trained for guerrilla street war," he said. "God is with us and our promise is heaven. When we are promised heaven, do you think death will stop us?"

The advance of the Sunni militants, who also control a third of Syria and have fought this past week in Lebanon, has sounded alarm across the Middle East and threatens to unravel Iraq, a country divided between Shi'ites, Sunnis and Kurds.

A US official said the Iraqi government had provided a planeload of ammunition to Kurdish fighters in Erbil, in what the official called an "unprecedented" act of military cooperation between Baghdad and the Kurds, who have long feuded over land and oil.

The US air strikes prompted renewed calls on jihadi online forums for attacks on the United States and oil interests in the Gulf.