The Islamic State group, which once controlled a cross-border "caliphate" home to millions of people, lost control of Mosul and the rest of its urban strongholds in 2017 but it has continued to wage guerilla-style attacks across Iraq.

On Thursday, a car bomb went off around dinner time at a restaurant in the war-ravaged west of Iraq's second city.

"A terrorist attack via car bomb hit near a restaurant in western Mosul," Iraq's security services said in a statement distributed to media.

The blast killed three people and wounded 12 others, a security official told AFP. A medical source confirmed the toll.

Neither could say whether the victims were civilians or combatants, but witnesses in Mosul said the restaurant is known to be frequented by security personnel.

There was no immediate claim of responsibility for the blast.

IS overran Mosul in 2014, transforming the northern city into its de facto Iraqi capital until government forces recaptured it in July 2017.

Months later, the Iraqi government declared it had fully defeated IS.

But the group still carries out bloody hit-and-run attacks against civilian and government infrastructure, mostly in the rugged mountain terrain of the north and in desert areas along the western border with Syria.