Dubai: The extent of the Iraqi army’s defeat at the hands of Isil became clearer on Wednesday when officials in Baghdad conceded that insurgents had stripped the main army base in of Mosul of weapons, released hundreds of prisoners from the city’s jails and may have seized up to $480 million (Dh1.8 billion) in banknotes from the city’s banks.

Iraqi officials said that two divisions of Iraqi soldiers — roughly 30,000 men — simply turned and ran in the face of the assault by an insurgent force of just 800 fighters.

“I know the reasons why the army collapsed,” Prime Minister-elect Nouri Al Maliki said on Thursday. “But now is not the time to point the blame to whoever ordered the army to fall back. Even if it’s a ploy, the generals who are responsible must be held accountable. A conspiracy has led Isil to occupy Mosul. Whoever is responsible will not get away with that they did.”

Isil extremists roamed freely on Wednesday through the streets of Mosul, openly surprised at the ease with which they took Iraq’s second largest city after three days of sporadic fighting.

Senior government officials in Baghdad were equally shocked, accusing the army of betrayal and claiming the sacking of the city was a strategic disaster that would imperil Iraq’s borders.

The developments seriously undermine US claims to have established a unified and competent military after more than a decade of training. The US invasion and occupation cost Washington close to a trillion dollars and the lives of more than 4,500 of its soldiers. It is also thought to have killed at least 100,000 Iraqis.

Early on Thursday the Sites monitoring group in the US said it had translated an audio statement by an Isil spokesman declaring that “the battle will rage in Baghdad and Karbala ... put on your belts and get ready”.

The New York Times, meanwhile, reported that Iraq last month secretly asked Barack Obama to consider bombing militant staging posts in Iraq.

— With inputs from agencies