Feuding Iraqi politicians should unite as a crucial operation to retake the city of Mosul from the Islamic State group draws near, a top US envoy said Thursday.

The latest turmoil in Baghdad saw a bitter row break out between Iraq's defence minister and parliament speaker, who are also the country's most prominent Sunni politicians.

The White House's special envoy to the coalition battling IS, Brett McGurk, said he had so far seen no impact on the campaign but called for greater cohesion ahead of Mosul.

"I will say when it comes to Mosul it'll be really important for Iraqi leaders to stay focused and be pulling together to get this right," he told reporters in Baghdad.

"It's not just a military campaign, which we're confident will go well, it's also the humanitarian element to make sure that IDPs (internally displaced persons) are taken care of and then the stabilisation to make sure that the ground is laid to return the people to their homes," he said.

Earlier this month, Defence Minister Khaled al-Obeidi accused speaker Salim al-Juburi of corruption, the row escalating in a travel ban on the head of the legislative house.

The judiciary since dropped the case against him after an expeditious hearing but the feud does not bode well for efforts to unite Sunni leaders in the run-up to an operation on Mosul.

Mosul, the country's second city, has been the main jihadist hub in Iraq since the Islamic State group seized it and proclaimed its "caliphate" more than two years ago.

The number of different players involved in the northern region and the scope of the likely population displacement will make an assault on Mosul Iraq's most challenging operation since it started fighting back against IS.

Prime Minister Haider al-Abadi has vowed Iraq would be rid of IS by the end of the 2016 but McGurk refrained from giving a specific timeframe.

"The liberation of Mosul is coming, we are now approaching the final phase of the planning and the liberation is coming, and it's about time," the US envoy said.

Iraq Kurds say IS financier killed in joint raid with US
Baghdad (AFP) Aug 11, 2016 - Kurdish authorities said their troops conducted a joint raid with US forces Thursday, killing a jihadist financier near a western Iraqi town that is far from where they usually operate.

"A joint operation was conducted by our Directorate General of Counter Terrorism and US Special Forces in the vicinity of Al-Qaim near the Iraqi-Syrian border," the Kurdish Regional Security Council said in a statement.

It said the raid killed Sami Jassem Mohammed al-Juburi, a man sanctioned by the US Treasury Department for supervising operations to fund the Islamic State group, including via the sale of oil and gas.

The statement did not specify the exact location of the operation.

The US-led anti-IS coalition confirmed its forces had taken part in a joint raid in Iraq on Thursday.

"Coalition forces conducted a combined operation in Iraq, Aug. 11, against an (IS) associated target," the coalition said in a statement emailed to AFP.

"We are assessing the results of the operation," the statement said, adding that "the mission was effectively coordinated with the government of Iraq and conducted in partnership with Iraqi security forces."

Al-Qaim is located more than 200 kilometres (125 miles) from the closest Kurdish lines, and a raid involving Kurdish forces in the area has the potential to anger Iraq's federal government.

Baghdad is at odds with the country's autonomous Kurdish region over long-running disputes about resources and territory.

US special forces also conducted a joint raid with Kurdish troops against IS in Iraq's Kirkuk province last year -- an operation in which an American soldier was killed.

That raid was also politically sensitive, as it involved Kurdish forces affiliated with the ruling Kurdistan Democratic Party operating in Kirkuk, where the Patriotic Union of Kurdistan, a party that has its own troops, holds power.

The US-led coalition is carrying out air strikes targeting IS, which overran large areas of Iraq in 2014, and also providing advise and other assistance to forces battling the jihadists.

US President Barack Obama repeatedly pledged there would be no "boots on the ground" to combat IS, but has sent American special forces to target the jihadists, who have so far killed three members of the US military.