Iraqi forces broke through to the jihadist-besieged Shiite town of Amerli, where thousands of people have been trapped for more than two months with dwindling food and water supplies.
It is the biggest offensive success for the Iraqi government since militants led by the Sunni Islamic State (IS) jihadist group overran large areas of five provinces in June, sweeping security forces aside.
The breakthrough came as America carried out limited strikes in the area, the first time it has expanded its more than three-week air campaign against militants outside of Iraq's north.
Aircraft from several countries also dropped humanitarian aid to Amerli.
The mainly Shiite Turkmen residents of the town in Salaheddin province were running desperately short of food and water, and endangered both because of their Shiite faith, which jihadists consider heresy, and their resistance to the militants, which has drawn harsh retribution elsewhere.
UN Iraq envoy Nickolay Mladenov had warned that they faced a "massacre" by the besieging militants.
"Our forces entered Amerli and broke the siege," Iraqi security spokesman Lieutenant General Qassem Atta told AFP, an account confirmed by a local official and a fighter from the town.
"It is a very important success," Atta later said on state television.
Colonel Mustafa al-Bayati said Sunday night that the town of Amerli is "completely secure", but that clashes were still ongoing in villages to its west.
The operation to free Amerli was launched on Saturday after days of preparations in which Iraqi security forces, Shiite militiamen and Kurdish fighters deployed for the assault and Iraqi aircraft carried out strikes against militants.
A Shiite militia commander, meanwhile, said Kurdish fighters and militiamen had surrounded militant-held Sulaiman Bek and Yankaja, north of Amerli.
US expands air campaign
The government's reliance on the thousands of Shiite militiamen involved in the operation poses serious dangers for Iraq, risking entrenching groups with a history of brutal sectarian killings.
The United States announced that it carried out three air strikes in the Amerli area, expanding its air campaign outside northern Iraq, while Australian, British, French and US aircraft dropped relief supplies for the town.
"At the request of the government of Iraq, the United States military today airdropped humanitarian aid to the town of Amerli," said Pentagon spokesman Rear Admiral John Kirby.
"The United States Air Force delivered this aid alongside aircraft from Australia, France and the United Kingdom, who also dropped much needed supplies."
The aid drops came alongside "coordinated air strikes against nearby (IS) terrorists in order to support this humanitarian assistance operation", he added.
The American strikes were at least indirectly in support of an operation involving militia forces that previously fought against US troops in Iraq.
Three American air strikes near Amerli, which happened early on Sunday Iraq time, destroyed five IS vehicles and a checkpoint, bringing the total number of US strikes since August 8 to nearly 120.
Western aid for Amerli was slow in coming, however, with the burden of flying supplies and launching strikes in the area largely falling to Iraq's fledgling air forces.
The US military also launched air strikes Saturday on IS forces near Iraq's largest dam, north of the militant-held northern city of Mosul, the Pentagon said.
Kurdish forces retook the dam after briefly losing it to the jihadists earlier this month, securing the source of much of the power and irrigation water for the region around Iraq's second city.
Two suicide bombers targeted security forces on Sunday in Ramadi, a city west of Baghdad where Iraqi forces have struggled to regain control from militants who have held shifting areas since early this year.
The blasts killed 13 people and wounded 17, police and a doctor said.
The jihadist Islamic State and its allies control significant areas north and west of Baghdad and in neighbouring northeastern Syria.
Their rule has witnessed a spate of atrocities that have shocked the world.
Washington has said that operations in Syria will be needed to defeat IS, but has so far ruled out any cooperation with the Damascus regime against the jihadists.
It has, however, attempted to enlist the support of long-time foe Tehran, a key backer of Syrian President Bashar al-Assad.
US Secretary of State John Kerry has urged "a united response led by the United States and the broadest possible coalition of nations" to combat IS.
US President Barack Obama has acknowledged that Washington has no strategy yet to tackle IS, which has declared an Islamic "caliphate" in the territory under its control in Iraq and Syria.