(Adds U.N. displacement figure, fighting near Baiji, border developments)
* Mortars hit "Camp Anaconda"
* 40 U.S. special operations personnel in Iraq
* Government troops battle fighters for control of refinery
By Raheem Salman
BAGHDAD, June 25 (Reuters) - Militants attacked one of Iraq's largest air bases and seized control of several small oilfields on Wednesday as U.S. special forces troops and intelligence analysts arrived to help Iraqi security forces counter a mounting Sunni insurgency.
Iraqi Prime Minister Nuri al-Maliki, who is fighting for his job and is under international pressure to create a more inclusive government, said he supported starting the process of forming a new cabinet within a week.
In northern Iraq the Sunni militants extended a two-week advance that has been led by the hardline Islamic State in Iraq and the Levant (ISIL) but also includes an amalgam of other Sunni groups angered by Maliki's rule.
They blame him for marginalising their sect during eight years in power. The fighting threatens to rupture the country two and a half years after the end of U.S. occupation.
U.S. Secretary of State John Kerry pressed Iraqi officials to form an "inclusive" government during a visit this week and urged leaders of the autonomous Kurdish region to stand with Baghdad against the onslaught.
A parliament session is planned within a week that will start the process of forming a new government based on the results of elections held in April. Maliki's Shi'ite-led State of Law coalition won the most seats but needs support of other Shi'ite groups, Sunnis and Kurds to build a government.
"We will attend the first session of parliament," Maliki said on state television, adding the commitment stemmed from "loyalty to our people" and respect for a call by Iraq's foremost Shi'ite clergy.
On Friday, Shi'ite Grand Ayatollah Ali al-Sistani, the most respected cleric among Iraq's Shi'ite majority, called for the government formation process to begin.
The United Nations says more than 1,000 people, mainly civilians, have been killed during the Sunni insurgents' advance in Iraq, spearheaded by al Qaeda offshoot ISIL.
The figure includes unarmed government troops machine gunned in mass graves by insurgents, as well as several reported incidents of prisoners killed in their cells by retreating government forces.
In addition to the bloodshed, close to a million people have been displaced in Iraq this year. Amin Awad, director of Middle East and North Africa bureau for the U.N. refugee agency, called Iraq on Wednesday "a land of displacement".
INSURGENTS SEIZE OILFIELDS
U.S. President Barack Obama has ruled out sending ground troops back to Iraq where they withdrew in 2011. He has offered up to 300 American military advisers, about 130 of whom have now been deployed. The advisers could gather information about targets for future air strikes although no decision has been taken to start American bombing.
Rear Admiral John Kirby, the Pentagon press secretary, said late on Tuesday an initial group sent to establish an operations centre included intelligence analysts and logistics experts as well as special operations troops.
Another 50 U.S. military personnel working in the region are expected to arrive within the next few days to create four additional assessment teams, he said. U.S. military personnel are also flying regular manned and unmanned reconnaissance flights over Iraq.
Iraqi state television reported that newly-arrived Pentagon advisers met with Baghdad's operations commander and agreed to set up a joint operation command.
Baghdad is racing against time as the insurgents consolidate their grip on Sunni provinces.
On Wednesday, militants overran the Ajeel oil site, 30 km (19 miles) east of Tikrit, which contains at least three small oilfields that produce 28,000 barrels per day, an engineer working at the field said.
The engineer said local tribes had taken responsibility for protecting the fields after police withdrew but that they also left after the nearby town of al-Alam was seized by militants.
Ajeel is connected to two pipelines, one running to Turkey's Ceyhan port and the other to the Baiji oil refinery, which remained a frontline early on Wednesday.
State TV showed troop reinforcements flying into the compound by helicopter to fend off the assault on Baiji, a strategic industrial complex 200 km north of Baghdad.
Local tribal leaders said they were negotiating with both the Shi'ite-led government and Sunni fighters to allow the tribes to run the plant if Iraqi forces withdraw. One government official said Baghdad wanted the tribes to break with ISIL and other Sunni armed factions, and help defend the compound.
The plant has been fought over since last Wednesday, with sudden reversals for both sides and no clear winner so far.
Militants including ISIL and allied Sunni tribes battled Iraqi forces in the town of Yathrib, 90 km north of Baghdad, into the early hours of Wednesday, witnesses and the deputy head of the municipality said. Four militants were killed, they said.
Insurgents have surrounded a massive air base nearby, which was known as "Camp Anaconda" under U.S. occupation, and struck it with mortars. Eyewitnesses said the air base had been surrounded on three sides.
BORDER CROSSINGS FALL
Iraq's defence ministry said it had destroyed four fuel tankers and three vehicles loaded with ammunition used by militants, south of the town of Seniya, which is west of the town of Baiji near the refinery.
In recent days, Baghdad's grip on the Western frontier with Syria and Jordan has also been challenged.
One post on the Syrian border has fallen to Sunni militants and another has been taken over by Kurds. A third crossing with Syria and the only crossing with Jordan are contested, with anti-government fighters and Baghdad both claiming control.
For ISIL, capturing the frontier is a step towards the goal of erasing the modern border altogether and building a caliphate across swathes of Iraq and Syria.
The group gained another boost in that direction when members of Syria's al Qaeda wing, the Nusra Front, pledged allegiance to it in the border town of Albu Kamal, strengthening its control of the frontier.
ISIL supporters posted images online of what they said were Nusra fighters taking an oath of loyalty to ISIL in the town.
"We cannot say (ISIL) controls Albu Kamal but we can say they are now in Albu Kamal," said Rami Abdurrahman of the British-based monitoring group the Syrian Observatory for Human Rights. ISIL and the Nusra Front share hardline Sunni ideology but have periodically fought against each other in Syria.
An Iraqi military spokesman said on Tuesday the government had carried out air strikes on a militant gathering in the town of al-Qaim near the Syrian border, which is under the control of the coalition of Sunni armed groups, including ISIL.
Locals in al-Qaim and security officials in western Anbar province accused Syria of carrying out the air raid. Western security officials said it was still unclear which government was responsible.
In northern Iraq's second largest city of Mosul, which has been under the control of ISIL and other insurgents for over two weeks, militants bombed a Shi'ite mosque in the Sharekhan neighbourhood in the city's northern outskirts, residents said. (Additional reporting by a reporter in Diyala, a reporter in Mosul, a reporter in Tikrit, Isabel Coles in Arbil, David Alexander in Washington and Sylvia Westall in Beirut; Writing by Alexander Dziadosz; Editing by Anna Willard and Peter Graff)
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