ISIS militants are opening only two or three of the dam's 26 gates on the Euphrates River for brief periods daily, the officials and residents said.
The head of the security council in the town of Khalidiyah, Sheikh Ibrahim Khalaf al-Fahdawi, and two residents of the nearby town of Habbaniya told CNN on Thursday that this move was to prevent river water overflowing from ISIS' side of the dam, and also to allow some water to flow downstream toward ISIS-held Falluja.
They added that the level of water in the Euphrates was now low enough that the river could be walked across, making it easier for ISIS militants to cross and attack the pro-government towns of Husaybah and Khalidiyah as well as the large security forces base at Habbaniya.
The banks of the river are defended by the Hashd al-Shaabi paramilitary forces, the same sources said, the majority from the Iraq-based Kataeb Hezbollah branch.
Families flee conflict
Iraq's Federal Police announced late Thursday that 800 fighters from its elite force have been deployed to reinforce troops in Anbar in their operations against ISIS. The fighters have trained in sniping, urban fighting, dealing with suicide car bomb attacks and storming fortified barracks.
The 800 will be assigned to special combat missions against ISIS in Ramadi and other areas, a statement from the Iraqi Interior Ministry said.
But residents of the towns of Habbaniya, Husaybah and Khalidiyah continue to flee, fearing an ISIS assault, according to officials and residents. Two residents said 300 families had fled as far north as Irbil, in the Kurdish-controlled area of Iraq.
There are conflicting reports as to how many families have fled Habbaniya and surrounding villages to take refuge in the town of Amiriyat al-Falluja in recent days, but officials suggest they number at least in the dozens. Pro-government tribal militias are dug in there but under frequent mortar attack from ISIS, according to Iraqi sources.
A senior security official told CNN the level of the Euphrates River had dropped by 1 meter (more than 3 feet) near Amiriyat al-Falluja.
Last week, the Iraqi government announced
a major operation by Iraqi forces and the Hashd al-Shaabi paramilitary forces to retake Anbar province. Ramadi is the capital of the province.
Sectarian tensions are high over the fall of Ramadi. Some critics of the often pro-Shia Baghdad government suggested the regime was reluctant to arm Sunni tribes against ISIS as it mistrusts them but also reluctant to send adequate reinforcements to fight for a predominantly Sunni area.
Humanitarian crisis looms
The United Nations warned Thursday that a lack of funding threatens vital aid operations supporting more than 8 million people affected by the conflict in Iraq.
The U.N. humanitarian coordinator for Iraq, Lise Grande, said the aid operation was hanging by a thread and that catastrophe looms if donors do not immediately make funds available.
"The crisis in Iraq is one of the most complex and volatile anywhere in the world," she said in a statement.
"Humanitarian partners have been doing everything they can to help. But more than 50% of the operation will be shut down or cut back if money is not received immediately."