Sunni Islamist militants have attacked Iraq's main oil refinery, causing damage to the site, in the latest stage of a surge that has included seizing territory across northern Iraq.
In Beiji, the militants clashed with security forces at the refinery Wednesday, which is located about halfway between Baghdad and Mosul.
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Militants took control of Mosul last week, and India's foreign ministry reported Wednesday that 40 Indian construction workers have been kidnapped from the city.
A spokesman said India has not received a demand for ransom and does not know the location of the missing workers. He also said 46 Indian nurses are stranded in militant-controlled Tikrit.
PetroChina, the single biggest investor in Iraq's oil sector, said on Wednesday that it had pulled some of its staff out of the Middle East nation, but production remains unaffected.
The United Arab Emirates also announced on Wednesday it was recalling its ambassador to Baghdad for consultations, saying it was worried that the Iraqi government's “sectarian” policies could heighten political tensions and worsen security there.
In a statement carried on the official WAM news agency, the foreign ministry added that the UAE, a close ally of Saudi Arabia, opposed any interference in Iraq's affairs and sought the creation of a national unity government there.
Iraqi Prime Minister Nouri al-Maliki gave a televised address vowing that his security forces would strike back against terrorism and described their earlier defeats at the hands of militants as a setback.
Al-Maliki claimed that Islamic State of Iraq and the Levant (ISIL) militants have joined up with members of former Iraqi leader Saddam Hussein's old Ba'ath Party to threaten the unity of the country and create sectarian strife.
He also accused major Sunni regional powers - Saudi Arabia and Qatar - of abetting the ISIL militants and local Iraqi Sunni politicians of taking part in what he called “the outside plot.”
Al-Maliki also warned that the sectarian conflict would “spread to neighboring Sunni states, and tear their countries apart as well.”
However, Saudi Foreign Minister Saud al-Faisal, speaking at an Islamic unity conference in Jeddah, said al-Maliki is responsible for creating a sectarian conflict and added that Syria's sectarian conflict has made matters even worse.
Meanwhile, Iranian President Hassan Rouhani pledged Wednesday that his majority Shi'ite country would do whatever is necessary to protect Shi'ite holy sites in Iraq from what he called "terrorists."
In Beiji, about 200 kilometers north of Baghdad, an oil refinery official said that Sunni militants clashed with government security forces and now control three quarters of the facility.
Asharqiya TV reported that the militants shelled the Beiji refinery, inflicting damage. The TV channel added that foreign workers were evacuated from the complex Tuesday.
Iraqi military spokesman Qassem Mohammed Atta insisted that government forces beat back the attack on the Beiji refinery, although eyewitnesses disputed his claim.
He said that 40 Sunni militants were killed in the clashes and that the Beiji facility has been recaptured by the government.
He also said Iraqi government forces have retaken most of the Turkmen town of Talafar, 400 kilometers north of Baghdad, as well, although fighting continues in scattered pockets.
Obama, Congress to discuss situation
Also Wednesday, President Barack Obama is due to host congressional leaders to discuss the situation in Iraq and possible responses to the militant advances.
The White House meeting comes as Obama considers a range of possibilities, including assistance to Iraqi security forces and carrying out airstrikes, while stressing the need for political unity.
Press Secretary Jay Carney said Tuesday there is no military solution to Iraq's problems, but that "Iraq needs significantly more help to break the momentum of extremist groups."
State Department spokeswoman Jen Psaki said the political component is important for Iraq's long-term success.
"Our view is that Iraq and the successful outcome here is not contingent upon the intervention of any country. They need to take steps on the political front to be more inclusive, to govern in a non-sectarian manner," Psaki said. "But the United States is - and the president is - considering a range of options, looking at factors including the national security interests of the United States."
Carney described that national security interest as making sure the ISIL is not able to establish a safe haven in the region. The militant group has taken control of several Iraqi cities and has threatened to attack Baghdad.
Saudi Arabia said on Wednesday neighboring Iraq faced the threat of full-scale civil war with grave consequences for the wider region and, in an apparent message to arch rival Iran, warned against outside powers intervening in the conflict.
“This grave situation that is storming Iraq carries with it the signs of civil war whose implications for the region we cannot fathom,” Foreign Minister Prince Saud al-Faisal told a gathering of Arab and Muslim leaders in Jeddah.
He urged nations racked by violence to meet the “legitimate demands of the people and to achieve national reconciliation [without] foreign interference or outside agendas."
Insurgency is 'biggest threat'
In an interview with VOA, Iraqi Foreign Minister Hoshyar Zebari called the recent insurgency the "biggest threat" for the Iraqi government. He said terrorism in Iraq is not only a threat to Iraq and its neighbors, but also to the United States.
He said assisting Iraq in the current conflict would be the "best option" for the United States, and claimed most Iraqi political leaders would prefer getting help from the United States than from neighboring Iran.
"Most of the Iraqi political leaders agree that American assistance in this fighting against terrorism in the country will be with less problem comparing to the Iranian participation," said Zebari.
Middle East analyst Riad Kahwaji, head of the Institute for Near East and Gulf Military Analysis, told VOA that the conflict in Iraq is now clearly a sectarian war, with Iran supporting al-Maliki, and Saudi Arabia and the Gulf States supporting opposing Sunni tribesmen.
Western intervention in the conflict, he argued, would be risky.
"I think the (Sunni militants') objective is to march towards Baghdad. I think this is likely to happen in the next couple of weeks," Kahwaji said. "Right now, we have a quickly deteriorating situation in Iraq and the international community must deal with it with great caution and avoid irrational, quick military intervention, otherwise they could worsen the situation, because you have a sectarian war and if you step in to attack one party, you will quickly find yourself sucked in."
Edward Yeranian contributed to this report from Cairo. Some information for this report provided by Reuters.