The clashes in Duluiyah are part of the Islamic State extremist group's larger offensive across Iraq as it tries to expand the territory under its control.
Fighters from the jihadi group barreled into town, some 80 kilometers north of Baghdad, yesterday, and quickly seized the mayor's office, police station, local council and courthouse.
They also blew up a bridge connecting the town with the nearby city of Balad.
Jassim Mohammed, who lives in Duluiyah, said dozens of militants in SUVs quickly pushed into the neighborhoods of Khazraj and Boujwar before facing stiff resistance from the Joubour tribe.
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The fighting today was with machine guns and RPGs, and there were casualties on both sides, Mohammed said.
He added that most of the tribesmen battling the militants are members of the local police force, which is largely composed of former army soldiers from the Saddam Hussein-era.
"They will not give up easily, the battles are fierce and ongoing," Mohammed said.
The capital has seen several small scale bombings, but no major attacks, since the militant offensive began. The blitz has caused jitters in Baghdad, where Shiite militias have joined security forces in recent weeks to try to boost security in the city, although relatively minor attacks still happen almost daily.
Today, two car bombs exploded in commercial areas of Baghdad, killing at least seven people.