IS members disguised as soldiers attacked a Hashed al-Shaabi unit in the Hawija region about 300 kilometres (185 miles) north of Baghdad on Sunday evening, the auxiliary force said in a statement.

"The attackers were dressed in military uniforms and during the fighting 27 of our heroes were martyred," said the Hashed, a key partner of the government in the battle against IS.

The extremist group, which has suffered a string of battlefield defeats in Syria and Iraq, claimed responsibility for the attack in an online statement.

The Hashed said the unit was conducting operations to "arrest terrorists and dismantle sleeping cells" around the city, in the province of Kirkuk,

A Hashed official who asked to remain anonymous told AFP the jihadists, disguised as soldiers, had set up a checkpoint close to Hawija.

They asked the Hashed paramilitaries to stop, get out of their vehicles and stand beside the road, on the pretext of conducting a search.

They then shot the Hashed fighters and fled, the official said.

Reinforcements arrived too late to stop the attack.

A senior police officer in the province, who also asked not to be named, said most of the bodies had been beheaded.

It was the deadliest attack against Hashed fighters since October when pro-government forces retook Hawija, which was the jihadists' last urban bastion in northern Iraq.

Iraq in December declared victory against IS after a years-long battle to retake large swathes of territory the extremists had seized in 2014.

But the Hashed says IS has not completely disappeared and that "sleeper cells" have been fighting a guerrilla war against it.