"Abandoned Iraqi army helmets tell a story of panic, disarray and ignominious flight," reports Paul Wood
Iran is ready to assist the Iraqi government in its battle against extremist Sunni Islamists, President Hassan Rouhani has said.
But he denied Iran had sent troops into Iraq to help bolster Iraqi government forces' defences.
The insurgents - from the Islamic State in Iraq and the Levant (ISIS) - have seized the cities of Mosul and Tikrit and are moving closer to Baghdad.
They regard Iraq's Shia majority as "infidels".
Iran has close ties with the Shia-dominated Iraqi leadership which came to power after the toppling of President Saddam Hussein, whose powerbase was the country's Sunni minority.
ISIS is a hardline Islamist militant group that grew during the US-led occupation and is one of several jihadist militias fighting the rule of Bashar al-Assad in neighbouring Syria.
"If the Iraqi government asks us for help, we may provide any assistance the Iraqi nation would like us to provide in the fight against terrorism," said President Rouhani at a news conference to mark the first anniversary of his victory in Shia Iran's presidential election.
"However, the engagement of Iranian forces has not been discussed. Providing help and being engaged in operations are different."
He added that so far the Iraqi government had not requested help from Iran.
And President Rouhani did not completely rule out co-operating with Iran's traditional foe the United States in combating ISIS: "We can think about if we see America starts confronting the terrorist groups in Iraq or elsewhere."
According to unnamed sources in both the the Wall Street Journal and CNN, Iran has already sent several elite units of its Revolutionary Guard to help Iraq, but Iranian officials have denied this.
'Threat to America'
US President Barack Obama has said he will take several days to decide what action to take over Iraq, but that no US troops will be deployed there.
Any US involvement "has to be joined by a serious and sincere effort by Iraq's leaders to set aside sectarian differences", he said.
Barack Obama: "The US will do our part, but understand that ultimately it is up to the Iraqis as a sovereign nation to solve their problems."
Mr Obama told reporters that ISIS represented a danger not just to Iraq and its people but that "it could pose a threat eventually to American interests as well".
He said Iraq needed additional support to "break the momentum of extremist groups and bolster the capabilities of Iraqi security forces".
'Fight terrorists'
Iraq's most senior Shia cleric has issued a call to arms to fellow Shias.
The message from Grand Ayatollah Ali al-Sistani, which was read out at Friday prayers in Karbala, said: "Citizens who are able to bear arms and fight terrorists, defending their country and their people and their holy places, should volunteer and join the security forces to achieve this holy purpose."
There are reports that thousands have already joined Shia militias, which could play a crucial role in the defence of Baghdad, says the BBC's Richard Galpin who is in the city.
Shia civilians are cleaning their weapons in readiness to fight the ISIS militants
They plan to help the military keep ISIS out of Baghdad
The fighting has forced hundreds of thousands to flee their homes
Many have moved into the autonomous Kurdish region
Meanwhile, militants in Mosul have been celebrating their easy victory
After taking Mosul late Monday, and then Saddam Hussein's hometown of Tikrit, the Sunni militants pressed south into the ethnically divided Diyala province.
On Friday, they battled Shia fighters near Muqdadiya, just 80km ( 50 miles) from Baghdad's city limits.
Reinforcements from both the Iraqi army and Shia militias have arrived in the city of Samarra, where fighters loyal to ISIS are trying to enter from the north.
How strong is Iraq's army?
In Geneva, UN human rights chief Navi Pillay warned of "summary executions and extrajudicial killings" and said the number killed in recent days might be in the hundreds.
The International Organization for Migration estimates that 40,000 people have fled Tikrit and Samarra, adding to the 500,000 people who are already believed to have left Mosul.
Many who have fled have crossed into the autonomous Kurdish region.
The Kurdish leaders have used the current fighting to take control of territory they have sought to rule for decades, such as the strategic districts of Saadiyah and Jalawla.
Analysts say the violence could end in Iraq being further partitioned into Sunni, Shia and Kurdish zones.
ISIS in Iraq
An Islamist fighter near a burning Iraqi army Humvee in Tikrit.
The Islamic State in Iraq and the Levant (ISIS) has 3,000 to 5,000 fighters, and grew out of an al-Qaeda-linked organisation in Iraq.
Joined in its offensives by other Sunni militant groups, including Saddam-era officers and soldiers, and sympathetic Sunni tribal fighters.
ISIS has exploited the standoff between the Iraqi government and the minority Sunni Arab community, which complains that Shia Prime Minister Nouri Maliki is monopolising power
The organisation is led by Abu Bakr al-Baghdadi, an obscure figure regarded as a battlefield commander and tactician
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