Amariya al-Falluja is believed to be a key strategic town and the attacks by Iraqi forces appear to have come as a US-led coalition continues to carry out air strikes on IS targets in Syria and Iraq.
The area around Amariya al-Falluja is now reported to be calm, but there is a standoff along the main road to Falluja to the north, which is controlled by IS.
The Pentagon has confirmed that US air strikes overnight had targeted other IS positions in Anbar province, 80-Km from Baghdad.
In Syria US war planes also struck four more oil fields controlled by IS militants near the group's stronghold in Raqqa. The UK-based Syrian Observatory for Human Rights (SOHR), which monitors the conflict in Syria, has revealed that casualties in US airstrikes were mostly civilians.
The air strikes in Syria appear to be focused on cutting off IS's revenue by targeting oil fields and, US President Barack Obama has indicated that a political solution to the crisis can come only when Sunni and Shia populations come together to defeat the IS jihadists.
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