Iraqi PM Haider al-Abadi announced victory against Daesh in Mosul on Monday, but the remaining militants are still holding out in their former stronghold in pockets of the Old City.
Iraqi forces clashed with Daesh militants holding out in Mosul's Old City on Wednesday, more than 36 hours after Prime Minister Haider al-Abadi declared victory over the group in Mosul.
Abadi's announcement marked the biggest defeat for Daesh since its lightning sweep through northern Iraq three years ago.
But pockets of Mosul are still insecure and the city has been heavily damaged by nearly nine months of gruelling urban combat in the city.
Iraqi forces exchanged gunfire with the militants overnight, two residents living just across the Tigris River from the area said.
Army helicopters strafed the Old City and blasts sent plumes of smoke into the air, though it was unclear if they were controlled explosions or bombs set off by Daesh.
An Iraqi military official attributed the activity to "clearing operations."
"There are Daesh (fighters) hiding in different places," he said.
"They disappear here and pop up there, then we target them."
"We still live in an atmosphere of war despite the victory announcement two days ago," said 45-year-old Fahd Ghanim.
Another resident said the blasts shook the ground around half a kilometre away.
Media access to the area has been heavily restricted since Abadi claimed victory on Monday, hailing "the collapse of the terrorist state."
Footage released by the Daesh news agency Amaq entitled Fighting till the last gasp and allegedly filmed in Mosul's Maydan district showed militants mixed in with civilians and unidentified corpses lying amid the rubble of an urban battlefield.
The video's authenticity could not be independently verified.
About 900,000 people have fled the fighting, with more than a third in camps outside the city and the rest living with family and friends in other neighbourhoods.
Activity has quickly returned to much of Mosul and work to repair damaged homes and infrastructure is already underway.
Many Daesh militants remain
The Iraqi official declined to estimate the number of militants or civilians remaining in the Old City.
But the top US general in Iraq said on Tuesday that as many as a couple of hundred Daesh militants could still be in Mosul.
"There are bypassed holdouts. We haven't cleared every building in this city the size of Philadelphia," Lieutenant General Stephen Townsend told reporters.
"There are still going to be losses from the Iraqi security forces as they continue to secure Mosul."
The US-led coalition said it had conducted three air strikes on Daesh in the Mosul area on Tuesday, targeting militants, machine-gun emplacements and rocket-propelled grenade systems.
South of the city, Iraqi security forces repelled an Daesh attack launched from western desert areas on the village of al Jaran, a tribal fighter said.
Reinforcements also arrived to help government forces oust militants armed with machine guns and mortars from the village of Imam Gharbi, further to the south.
Daesh had taken around 75 percent of the village since storming it last week.
These are the kind of asymmetric, guerrilla-style strikes Daesh is expected to concentrate on now as US-backed Iraqi forces regain control over cities the group captured during its shock 2014 offensive.
Another attack on a border guard convoy in western Anbar province, near the Syrian border, killed two soldiers and wounded four on Tuesday, military sources said.
Separately, 28 civilians were kidnapped in the Iskandariya district south of Baghdad this week and 20 of them were found dead later, a police officer said.
Suspects detained by the authorities said they belonged to the Shia Muslim Asaib Ahl al-Haq militia.
A Baghdad-based spokesman for the group, whose fighters are taking part in the Shia-led government's campaign against Daesh, said he had no knowledge of the incident.