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A diverse coalition of Iraqi forces launched a long-awaited offensive against Islamic State in Mosul, one of the last major cities still controlled by the militant group.

In a nationally televised announcement early Monday, Iraq time, Prime Minister Haider al-Abadi announced the start of the push to take back Iraq's second-largest city.

Reclaiming Mosul is seen as essential to the broader battle against Islamic State. The group has suffered a string of losses lately in its self-declared caliphate, including on Sunday, when Syrian rebels backed by Turkey and the U.S. drove the militants from the Syrian town of Dabiq.

"The hour of victory has sounded and the Mosul liberation operation has started," Mr. Abadi said while surrounded by senior Iraqi commanders. "We urge you, the heroic people of Mosul, to cooperate with our security forces to rescue you."

The assault on Mosul comes after months during which Iraqi forces have tried to capitalize on discontent with Islamic State's harsh rule to turn locals against the group and seek aid for Iraqi forces. In some cases, Iraq has supplied arms to residents.

Mass defections, internal rivalries and an increasingly restive local population have contributed to a sense of confidence inside Iraq's military.

Still, Iraqi and American officials expect a tough fight, with a specific concern that a desperate group of fighters will attempt to use the city's 1.2 million residents as human shields. Aid agencies and the United Nations are bracing for an expected exodus that could test their capacity to provide humanitarian assistance.

The fight is also a test of Iraq's ability to remain united. Mosul is majority Sunni Muslim, but is located in one of the country's most diverse regions and was once home to many of Iraq's smaller ethnic minorities.

Islamic State, a Sunni-led group, sent shockwaves through the region when it captured Mosul in June 2014, a blitz that saw Iraq's military and police melt away despite billions of dollars spent by the U.S. to train and equip government forces.

It was in Mosul later that month that Islamic State leader Abu Bakr al-Baghdadi made his first and only public appearance, giving a Friday prayer sermon in one of the city's grandest mosques. There he designated Mosul the self-declared caliphate's Iraqi capital, a home for both the group's leadership and families of thousands of its foreign fighters.

The Iraqi military has since recovered and is riding a wave of momentum in which they have evicted Islamic State from major cities including Sinjar, Beiji, Ramadi and Fallujah since the end of last year.

Kurdish Peshmerga fighters and local Sunni tribal fighters are participating in the Mosul offensive, while Iran-backed Shiite militias have been tasked with securing areas south of the city.

Just before Mr. Abadi's announcement, Peshmerga forces massed outside Mosul appeared buoyant and eager to launch the operation, as fighter jets and helicopters traversed the night sky.

Many fighters said they were unable to sleep, too excited over engaging Islamic State in what they considered their last stand against the militants.

Iraq's military said it expects Islamic State to put up a stiff resistance, using boobytraps, suicide vehicle attacks, snipers and human shields to repel the onslaught, taking advantage of Mosul's dense urban architecture and population.

A mid-ranking Islamic State commander said in an interview over Facebook that the group has made a tactical decision to partially abandon Mosul, recalling their "human resources" to Syria where they hope to strengthen their foothold. "There will be no big great epic battle in Mosul," the commander said. "The tactic now is hit-and-run."

The U.N. believes that at least 200,000 people will leave the city in the initial phases of the fight. The potential humanitarian disaster is just one of the many complications facing the bid to reclaim Mosul.

Unlike previous fights to dislodge Islamic State from Iraqi cities, this fight is the first time Iraq's divided armed groups have been tasked with working together.

In the weeks leading up to the battle, Iran-backed Shiite militias jockeyed for a more prominent role in the fight. They proved to be formidable soldiers in retaking other Iraqi cities, including Tikrit and Fallujah, earning political influence and popularity among Iraq's Shiite majority.

The militias' demands followed a public spat between Turkey and the Baghdad government over the presence of Turkish troops near Mosul. Ankara's insisted that its forces would not withdraw, and would hold sway over the campaign to reclaim Mosul.

But Iraqi Sunnis and the U.S. have tried to keep the militias away from Iraq's Sunni heartland following allegations of widespread revenge killings and detentions of Sunni men the militias accuse of being Islamic State sympathizers.

Eleventh-hour negotiations in early October by Mr. Abadi with the disparate armed groups restored the original battle plan, which calls for only Iraq's military and allied Sunni tribal fighters to enter the city.

Ghassan Adnan, Mohammad Nour Alakraa and Gordon Lubold contributed to this article.

Write to Tamer El-Ghobashy at tamer.el-ghobashy@wsj.com and Ben Kesling at benjamin.kesling@wsj.com

(END) Dow Jones Newswires

October 16, 2016 21:35 ET (01:35 GMT)

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