The Iraqi Pm said, "Security forces have tightened their control inside the city and there are still some pockets that need to be cleansed in the coming hours."
Iraqi Prime Minister Haider Al-Abadi has declared victory over the battle in Fallujah against DAESH terrorists.
Iraqi forces on Friday entered the center of Fallujah nearly four weeks after the start of a U.S.-backed offensive that cleared out the tens of thousands of residents still there.
Government troops, supported by multiple air strikes from a U.S.-led coalition, recaptured the municipal building, though the ultra-hardline militants still controlled a significant portion of Fallujah, an hour's drive west of Baghdad, and many streets and houses remain mined with explosives.
Federal police raised the Iraqi state flag above the government building and continued pursuing insurgents, according to a military statement.
US Defense Secretary Ash Carter said Iraqi forces had taken back a portion of the city.
"There's still some fighting to be done."
Abadi declared victory shortly after nightfall, as government forces continued pushing into parts of the city held by the militants.
Security forces have "tightened their control inside the city and there are still some pockets that need to be cleansed in the coming hours," he said in a brief speech on state television.
Troops could be seen coming under sniper fire earlier in the day as they entered a large mosque about 100 meters from the municipal building.
Clashes also involved gun fire, artillery and aerial bombardment, sending clouds of smoke towards the sky above the city center.
Heavily armed Interior Ministry police units were advancing along Baghdad Street, the main east-west road running through the city, and commandos from the counter-terrorism service (CTS) had surrounded Fallujah hospital, the military statement said.
Sabah al-Numani, a CTS spokesman, said on state television that snipers were holed up inside the main hospital.
Iraq launched a major operation on May 23 to retake Fallujah, a bastion of the Sunni Muslim insurgency against U.S. forces that toppled Saddam Hussein, a Sunni, in 2003, and Shi'ite-led governments that followed.
DAESH has begun allowing thousands of civilians trapped in central Fallujah to escape and the sudden exodus has overwhelmed displacement camps already filled beyond capacity.
More than 6,000 families left on Thursday alone, according to Fallujah Mayor Issa al-Issawi, who fled following the seizure of the city in January 2014.
"We don't know how to deal with this large number of civilians," he told Reuters on Friday.
The number of displaced people surpassed 68,000, according to the United Nations, which recently estimated Fallujah's population at 90,000, only about a third of the total in 2010.
Witnesses said Ithe terrorist group had announced via loudspeakers that residents could leave if they wanted. It was unclear why the group changed tack after clamping down on civilian movement only a few days ago.
The Norwegian Refugee Council (NRC), which has been providing aid to displaced people, said escapees reported a sudden retreat of terrorists t key checkpoints inside Fallujah that had allowed civilians to leave.
"Aid services in the camps were already overstretched and this development will push us all to the limit," said NRC country director Nasr Muflahi.
DAESH, which by U.S. estimates has been ousted from almost half of the territory it seized when Iraqi forces partially collapsed in 2014, has used residents as human shields to slow the military's advance and help avoid air strikes.
Addressing Fallujah's residents, Abadi said in his speech: "We want there to be security and peace in this city for you to go back to live there."