Lieutenant Ali Hussein listened intently as the elderly man explained where he thought the jihadist fighters were over the rattle of machinegun fire.

"My neighbour shouted to me and told me he saw them," the white-haired man said. The three jihadists were still thought to be in a nearby house.

Iraqi special forces were battling Wednesday to clear the Al-Bakr neighbourhood of Mosul as they thrust deeper into territory controlled by the Islamic State group.

Despite fighting their way into the district the day before, pockets of IS fighters were still putting up resistance.

Shots echoed down the residential street where the Iraqi forces were based and the smouldering wreckage of an armoured yellow truck bomb still packed with undetonated explosives stood at the corner of the block.

Hussein immediately turned to his troops and ordered them to follow the man's lead.

"Take bazookas and flamethrowers with you," he said.

"Be careful," he told them over the walkie-talkie as they disappeared down the street. "God bless you!"

A few minutes later the call came back that the house was empty.

- 'We've been waiting' -

As the Iraqi forces have pushed into Mosul many residents have stayed behind -- either taking a conscious decision to remain or unable to run the gauntlet to leave.

While the large numbers of civilians has hampered the use of air power against IS their presence has its upside for the Iraqi forces -- they provide valuable intelligence tip-offs on the ground.

"It is very important. It happens every time we liberate a district," Hussein told AFP.

"The most important thing about it is that there are sleeper cells of jihadists" whose whereabouts the locals can reveal.

Hussein said that the special forces were also building up a network of informants to supply information on IS movements in areas that they are yet to capture.

"When we enter a district we have informants. They contact their relatives in other districts so they become new informants for us when we enter those districts," he said.

As explosions rang out nearby some soldiers from the Najaf regiment that Hussein commands took shelter in a nearby civilian house where the family cut down oranges from a tree in the garden and offered them around.

Standing in the gateway of the house Amer Ali, 66, said residents were often all too happy to help the advancing Iraqi troops.

"We've been waiting for them with all our heart," Ali said. "We were in a big prison for two years."

Ali said that in the area around there were not many jihadists and that most withdrew ahead of the Iraqi army's entrance into the district.

But the elite Counter-Terrorism Service was taking no chances and commander Hussein told his men to go door-to-door through every house around.