Iraqi forces in Ramadi are moving street by street to force out ISIL militants in the hope of recapturing the city by the end of the week.
Officials say the operation marks the most significant progress made by the military since Ramadi fell to the group in May.
The capital of the vast Anbar Province lies just over 100 kilometres west of Baghdad.
Its fall to ISIL was a major blow to a government struggling to claw back territory from the group.
Analysts suggest ISIL has lost 14 percent of its territory across Iraq and Syria in the past year. Despite this, it has captured new, strategically important territory and has managed to hold on to Iraq’s second city Mosul.
While Iraqi officials are optimistic the recapture of Ramadi will be swift, the US coalition was more cautious.
The army’s approach has been hindered by snipers and suicide bombers, and reports suggest ISIL is rounding up people to possibly use as human shields.
US spokesman Colonel Steve Warren estimates up to 350 ISIL fighters remain in the city.