The Iraqi government in a statement accused neighbouring Saudi Arabia of supporting the insurgents and providing them with financial support – allegations Riyadh has rejected.
The Sunni rebel group Islamic State in Iraq and the Levant (ISIS) grew out of an al-Qaeda-linked organisation in Iraq with an 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. The militants are exploiting the standoff between Iraqi government and the minority Sunni Arab community, which complains that Shia Prime Minister Nouri Maliki is monopolising power.
The Shia majority Iran is helping the Iraqi government to survive the latest threat from the Sunni militia.
The Sunni militants 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 the city of Baquba – just 60km (37 miles) from Baghdad – in an overnight assault, before government troops and allied Shia militia regained control 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, BBC reported.
Meanwhile, the PM Nouri fired senior officers for failing to halt a sweeping advance by Sunni Islamist rebels.
Four army commanders were dismissed for failing to perform “their national duty”, a government statement said on Tuesday.
Iraqi forces have been engaged in heavy clashes with the rebels who have seized several key cities in the past week.
The US is deploying up to 275 military personnel to protect staff at its huge embassy in the capital, Baghdad.
The Iraqi officers fired on Tuesday include the top commander for Nineveh, the first province where ISIS fighters made major gains.
Another senior officer would be court-martialled in absentia for deserting his position and fleeing a battle, the government said.
The announcement came as army reinforcements reportedly arrived in the strategic city of Tal Afar in Nineveh province to help recapture the town from insurgents.
The city of 200,000 people, which has a mixed Sunni and Shia population, lies between Mosul and the Syrian border and was taken just before dawn on Monday.
The Iraqi air force was said to have carried out strikes in the area.