The fighters had advanced to within a half hour's drive of Arbil, capital of Iraq's Kurdish region and a hub for U.S. oil companies. A Pentagon spokesman said two F/A-18 aircraft dropped laser-guided bombs on a mobile artillery piece used by Islamic State fighters to shell Kurdish forces defending Arbil.
Obama authorised air strikes after tens of thousands of Christians fled for their lives from Islamic State fighters who have crucified and beheaded captives. The US also started to drop relief supplies to members of the ancient Yazidi sect massed on a desert mountaintop seeking shelter from the fighters who had ordered them to convert or die.
In Baghdad, where politicians have been paralysed by infighting while the state falls apart, the top Shi'ite cleric all but demanded Prime Minister Nuri al-Maliki quit, a bold intervention that could bring the veteran ruler down.
Sunni fighters from the Islamic State, an al Qaeda offshoot have swept through northern Iraq since June.