BEIRUT—According to sources at the Armenian Prelacy in Iraq, 65 Armenian families and a priest in Mosul were forced out of the city after Islamist militants raided the city and took control of Iraq’s second largest city, reported the Aztag Daily newspaper.

Insurgents raised black flags over parts of the city on Tuesday, as soldiers fled their posts after Sunni extremists known as the Islamic State of Iraq and Syria (ISIS) took the city after four days of heavy fighting against Iraqi forces.

“When the battle got tough in the city of Mosul, the troops dropped their weapons and abandoned their posts, making it an easy prey for the terrorists,” Osama Nuajaifi, the speaker of Iraq’s parliament who hails from Mosul, said during a news conference in Baghdad, according to Time Magazine. “Everything is fallen. It’s a crisis. Having these terrorist groups control a city in the heart of Iraq threatens not only Iraq but the entire region.”

According to Time.com, terrified residents were streaming out of the city—the International Organization for Migration reports 500,000 people have left their homes since Saturday—and there were reports that water and electricity were cut off. On its Twitter account, ISIS gloated about seizing arms and vehicles abandoned by the city’s supposed defenders. Elsewhere in the country, its fighters have been spotted driving Humvees captured from government forces in previous encounters.

The situation was dire in more ways than one. Besides its symbolic importance as Iraq’s second-largest city—and the historic home of the country’s oil industry—Mosul has crucial strategic significance. It sits near both Turkey and the largely autonomous Kurdish zone of northern Iraq, but most importantly functions as Iraq’s most prominent doorway to Syria, where ISIS emerged as one of the main rebel forces arrayed against Syrian President Bashar Assad, reported Time.

Despite warnings from analysts that the insurrection was at heart a political problem that might only be worsened by a heavy-handed military response, al-Maliki announced his government had created a Crisis Unit and was preparing a counter-offensive that, according to one report, would include civilian volunteers armed by his government. Nuajaifi, the parliament speaker, warned: “They will re