Islamist extremists who had gained control over Northern Iraq were forced to retreat and gave up an area hit by US air strikes on Sunday.
The US' three-day old military campaign showed signs of bearing positive results, as members of the jihadist group IS, formerly known as Isis, were forced to take evasive action and relinquished territory they had won from Kurdish forces.
News of the extremists retreating came as around half of the 40,000 people believed to be trapped on Mount Sinjar managed to flee, thanks to help from Kurdish rebels who had crossed the Syrian border to help them.
The White House, however is considering options to evacuate the remaining civilians trapped in Northern Iraq and could launch a rescue mission.
At least 15,000 Iraqis are estimated to be stranded on Mount Sinjar and are unable to reach the safe passage the Kurdish forces had opened towards the north of the country.
"We're reviewing options for removing the remaining civilians off the mountain," deputy US national security adviser Ben Rhodes told news agency Reuters on Sunday.
"Kurdish forces are helping and we're talking to the UN and other international partners about how to bring them to a safe place."
Kurdish forces had taken back two towns in northern Iraq, Hoshiyar Zebari, a Kurdish official, told Reuters on Sunday.
Zebari also confirmed that the Kurdish forces had been supported by American air strikes.
The US conducted four separate air strikes, while Britain, Iraq and Turkey delivered medical aid and food to the trapped Yazidis.
Meanwhile, the political tension in the country rose even further as Nouri al-Maliki, Iraq's Prime Minister, criticised President Fuad Masum for failing to intervene after parliament failed to give him a third term.
Maliki has faced intense pressure to relinquish his position, amid the Islamist insurgency in the north of the country, while forces supporting the prime minister had taken up positions around Baghdad.
Maliki won the majority of seats in April's elections but the parliament refused to give him a third term and he vowed to submit an official complaint against President Masum.
Masum was accused of "committing a clear constitutional violation for the sake of political calculations and giving priority to the interests of some groups at the expense of the higher interests of the Iraqi people".
"This attitude represents a coup on the constitution and the political process in a country that is governed by a democratic and federal system," continued Maliki.
"The deliberate violation of the constitution by the president will have grave consequences on the unity, the sovereignty, and the independence of Iraq and the entry of the political process into a dark tunnel."
Officials in Washington said they were closely monitoring the situation in Iraq but reiterated their support for the country's president.
"The US fully supports President Fuad Masum in his role as guarantor of the Iraqi constitution," a state department spokesman said.
"We reaffirm our support for a process to select a prime minister who can represent the aspirations of the Iraqi people by building a national consensus and governing in an inclusive manner."
James Hughes, chief market analyst at Alpari UK, warned the instable political situation in Iraq could affect the markets throughout the week.
"The real worry for markets will be the uncertainty over the horrendous stories gripping Iraq and Gaza," Hughes said.
"Any escalation in fighting or major developments will of course give traders an extra unwanted story to keep an eye on when it comes to their trading."