Later, ISIS posted a video that it says shows captured Kurdish soldiers, known as Peshmerga, wearing orange clothing similar to that worn by by American journalists James Foley and Steven Sotloff in other videos posted by the militant group.

Three masked men appear to decapitate one of the orange-clad soldiers in front of a mosque in Mosul.

In the video, titled "A message with blood to the leaders of the America Kurdish alliance," ISIS demands that the Kurdish government withdraw its forces from areas where it is battling the group.

CNN could not independently confirm the claims or the authenticity of the videos.

Fighting flares near Mosul Dam

The videos come amid reports of fresh fighting between ISIS and Kurdish forces near Iraq's Mosul Dam and the burning of oil wells near the strategic town of Zummar.

The Peshmerga are battling the militants near the town, important because of its location to the main thoroughfare that connects Mosul to the Syrian border, as well as near the Mosul Dam and the strategic Ain Zala oilfield, which ISIS forces seized from the Kurds this month, said Faud Hussein, chief of staff for Kurdish regional President Masoud Barzani.

Torching the three oil wells that make up the Ain Zala oilfield is an apparent effort by ISIS fighters to try to interrupt a Peshmerga advance on ISIS positions, Hussein said.

The extent of the damage to the oil fields wasn't immediately known.

The fighting comes nearly two weeks after thousands of Peshmerga and Iraqi commandos ousted ISIS forces for control of the dam, a crucial facility that provides electricity for millions of people in Iraq.

Kurdish officials have credited U.S. airstrikes against ISIS with helping Peshmerga forces push back against the extremists, whose breathtaking gains and brutal tactics captured the attention of world leaders.