Some 300 Daesh fighters remain in the small patch of territory still controlled by the group in Mosul's Old City, a senior Iraqi commander said Wednesday.

Lt. Gen. Sami al-Aridi of Iraq's special forces told The Associated Press that the militants' hold on Mosul has shrunk to a 500 square meter (600 sq. yard) area. A large number of civilians are believed to be trapped in the Daesh-run enclave, with around 1,500 fleeing with every 100-meter (yard) advance by Iraqi forces.

Iraqi forces moved to besiege the Old City before launching their attack in order to prevent Daesh fighters from fleeing to neighboring Syria, but al-Aridi said hundreds of militants still managed to escape from the Old City alone.

"They just shave their beards and walk out," al-Aridi said. "Just yesterday we captured two among a group of women and children."

Late Tuesday, Iraq's Prime Minister Haider al-Abadi congratulated the armed forces on a "big victory" in Mosul, despite ongoing clashes. The prime minister declared an end to the terrorist group's self-styled state in June.

"Praise be to God, we managed to liberate (Mosul) and proved the others were wrong, the people of Mosul supported and stood with our security forces against terrorism," al-Abadi said.

Iraqi army and allies launched a full-scale offensive to liberate Mosul from Daesh terrorists seven months ago. Iraq's second largest city was captured by Daesh in June 2014, during their rapid advance into predominantly Sunni northwestern and central Iraq.