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BAGHDAD -- Iraqi political leaders conceded Thursday that their embattled government lacks a broad strategy or enough military power to break the grip of Islamic militants who control other parts of the country.

Despite the encroaching threat from the Islamic State militants, Bagdhad has been distracted by political uncertainty over who will lead the nation and prevent the extremists from moving in on the capital.

"Now the priority is defending Baghdad," said Zuhair al-Chalabi, a government official who headed an economic development council in Mosul.

Prime Minister Nouri al-Maliki, whose Shiite-dominated government alienated minority Sunnis now sympathetic to the Islamic State, had sought a third four-year term, even though his support has withered in Iraq and the wider region. But al-Maliki agreed to step down Thursday night, three days after the new president nominated a Shiite politician, Haider al-Abadi, as prime minister.

Some 65 miles away in Fallujah, fierce fighting between the Sunni militants and Iraqi troops loyal to the government killed at least four children Thursday. Fallujah has been held by the Islamic State militants since January. Fallujah hospital director Ahmed Shami said a woman and 10 militants also died in the clash.

The insurgency has driven hundreds of thousands of Iraqis from their homes.

President Obama said Thursday that air strikes would continue against militants. He also praised development of a new government in Baghdad, saying it will be better able to take control of the fight against militants.

IThe U.S. has conducted 25 airstrikes in Iraq since it first intervened last week. About half were designed to hit militant forces in the Kurdish region and the other half were targeted at militants near Mount Sinjar, where tens of thousands of members of a small religious sect had fled, according to Rear Adm, John Kirby, the Pentagon press secretary.

The U.S. air strikes are not designed to break the grips the militants have on other parts of the country.

Four Iraqi divisions collapsed when the militants, who call themselves the Islamic State of Iraq and the Levant, attacked Mosul in June, triggering a wave of attacks by militants who were nearing Irbil, the capital of the Kurdish region, when the U.S. launched air strikes.

Most of the remaining army is now deployed around Baghdad. The government has also helped organize Shiite militias to fight the militants and has encouraged tribes in western Iraq to do likewise. Attempts at counter attacks by Iraqi forces have generally petered out.

Iraqi officials believe it will take a broader effort backed by U.S. airstrikes to dislodge militants in Mosul, Iraq's second largest city, and parts of western Iraq.Mosul, Iraq's second largest city, is more than 200 miles from Baghdad and much of the territory in between is controlled by militants or contested.

"It is impossible to get Mosul back without international support," Chalabi said.

In a televised statement Thursday, Obama said thousands of lives of Yazidis, the refugees trapped on Mount Sinjar, were saved thanks to U.S. air drops of food and water and airstrikes that held militants at bay. "We broke the mountain siege of Sinjar," Obama said.

Because of the humanitarian effort, Obama said, most Yazidis had escaped to safety and those remaining had adequate supplies of food and water. He said no further rescue operation needs to be undertaken.

Obama said that air strikes designed to protect American personnel in Iraq would continue and the United States stands ready to launch further humanitarian missions if required. He reiterated his pledge to keep combat troops out of Iraq.

Contributing: David Jackson and Ray Locker in Washington, and John Bacon in McLean, Va.

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