The US secretary of state is in the northern Iraqi city of Irbil holding talks with Kurdish leaders as Sunni rebels continue their offensive, the BBC reported.

John Kerry’s central aim is to assist the formation of a new, more inclusive Iraqi unity government.

Mr Kerry said Iraq faced a moment of great urgency as its very existence was under threat.

The Sunni rebels say they have fully captured the country’s main oil refinery at Baiji, north of Baghdad.

Meanwhile, a United Nations human rights team in Iraq has reported that at least 1,075 people have been killed in Iraq in June, most of them civilians.

The UN said the figures, which include a number of verified summary executions, should be viewed as an absolute minimum.

Mr Kerry’s meetings with Kurdish leaders come as the Kurdish region’s President Massoud Barzani strongly suggested that it would seek formal independence from the rest of Iraq, a move the US would regard as destabilising in the current circumstances.

In a CNN interview, he said: “Iraq is obviously falling apart… The time is here for the Kurdistan people to determine their future and the decision of the people is what we are going to uphold.”