The militants are in full military gear and seen digging trenches and building barriers, said a source in Mosul, capital of Nineveh province.
They are also reinforcing defenses on major roads connecting Iraq’s second-largest city to Kurdish-held areas.
Fighters – particularly foreign jihadis – are believed to have been deployed around the city, said the source, speaking on condition of anonymity.
The Islamic militants are particularly concentrated on the borders of Duhok province in the south, and on the frontline south of Kirkuk.
A major attack by the US air force and Kurdish ground troops is anticipated on Mosul, the first city in Iraq to fall to the militants in June.
Meanwhile, the Iraqi air force dropped leaflets over Salahaddin province on Wednesday, warning people to stay away from IS installations and wherever the militants are gathered.
Similar flyers were dropped on the city of Tikrit ahead of an Iraqi army assault, according to an Iraqi official.
But the militants have so far repelled several major assaults by the Iraqi army on the city of Tikrit.
Over the past two weeks the jihadis have lost much territory in Nineveh to Kurdish Peshmerga forces, who have killed more than 100 militants and two top military commanders.
In Paris on Monday, a US-led coalition of 26 nations pledged financial and military support to defeat the IS, which has declared an Islamic caliphate in parts of Iraq and Syria and vows to take its jihad to the world.
