BAGHDAD, May 22 (Reuters) - Islamic state fighters pressed an advance east of Ramadi on Friday after breaching Iraqi defenses outside the city the insurgents overran last weekend in a major defeat for the Baghdad government.
The fall of Ramadi is the most significant setback for Iraqi forces in almost a year and has cast doubt on the effectiveness of U.S. strategy in helping Iraq to fight Islamic State.
While pro-government forces are seeking to retake the town, Islamic State fighters have been pushing forward in the direction of Fallujah in a bid to take more territory in Anbar province that would bring them closer to the Iraqi capital.
Amir al-Fahdawi, a leader of the pro-government Sunni tribal force in the area, said the militants were now around 5 km (3 miles) from the town of Khalidiya next to the Habbaniya military base where security forces and members of the Hashid Shaabi (Popular Mobilization) Shi'ite militia are massing.
"We are running short of arms and ammunition and we appealed yesterday for reinforcements. Zero additional troops plus zero ammunition back-up lead to zero morale for our fighters," Fahdawi told Reuters.
"Today we retreated to Siddiqiya and I'm not sure if my fighters will hold up for much longer: they are tired and broken."
Hundreds of people were fleeing as the militants drew closer, Anbar provincial council member Azzal Obaid told Reuters.
Obaid said the insurgents were exploiting low morale among the security forces, and that the only way to stop them would be to deploy Shi'ite paramilitaries in large numbers.
Iraq's top Shi'ite cleric, Grand Ayatollah Ali al-Sistani, called for a plan to purge the country of Islamic State militants after they overran Ramadi.
In his first sermon since then, Sistani's representative Sheik Abdulmehdi al-Karbalai did not refer explicitly to the city. But he said: "We must have a precise and wise plan drawn up by professional and patriotic figures ... to resolve the military and security issues and begin to purge Iraqi lands of all terrorists."
Iraqi Prime Minister Haider al-Abadi has sent Shi'ite paramilitary groups to try to retake Ramadi, capital of the westerly Anbar province, at the risk of inflaming tensions with the region's aggrieved predominantly Sunni Muslim population.
The insurgents are now marching east from Ramadi and late on Thursday overran an Iraqi defensive line, advancing towards the Habbaniya military base.
"The focus has been on defense more than offense: this enables the enemy to have the upper hand," Sistani said. "The initiative must always remain with the armed forces, Hashid and tribal fighters."
Last June, after Islamic State militants seized the northern city of Mosul, a call to arms by Sistani mobilized thousands of mainly Shi'ite volunteers to blunt the group's surge. (Writing by Isabel Coles; Editing by Kevin Liffey and Giles Elgood)