CBS reported overnight an Iraqi unit, which had Australian and United States advisors attached to it, was hit with mustard gas on Sunday, leaving 25 Iraqi soldiers requiring treatment.

None of the Australians or Americans were injured in the attack, although Brigadier General Yahya Rasool told the Associated Press that six Iraqi soldiers required treatment for breathing problems.

A spokesman for Defence Minister Marise Payne said the gas attack was aimed at Iraqi ground forces in Mosul.

"Australian medics at a secure base outside Mosul provided first aid to the Iraqi soldiers affected by the gas attack," he said.

"The failed gas attack highlights Daesh's desperation as Iraqi ground forces continue operations to liberate Mosul."

The ABC has reported that the Pentagon is aware of the incident, which it described as being a "low grade" chemical attack.

It's understood Islamic State was behind the attack, and CBS has reported the chemical has been identified as mustard gas.

Mustard gas was used to deadly effect in World War I.

According to CBS, two sources said masks and other equipment were distributed to forces in the wake of the attacks. They spoke on condition of anonymity.

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