Sunni militants have blitzed through the vast desert of western Iraq, capturing four towns and three border crossings and deepening the predicament of the Shiite-led government in Baghdad led by Nouri Maliki.
The latest military victories - including two border posts captured yesterday, one along the frontier with Jordan and the other with Syria - considerably expanded territory under the militants' control just two weeks after the al-Qaida breakaway group began swallowing up chunks of northern Iraq, heightening pressure on Mr Maliki to step aside.
The lightening offensive by the Islamic State of Iraq and the Levant (Isis) takes the group closer to its dream of carving out an Islamic state straddling both Syria and Iraq.
Moreover, controlling the borders with Syria will help it supply fellow fighters there with weaponry looted from Iraqi warehouses, significantly reinforcing its ability to battle beleaguered Syrian government forces.
If the Sunni insurgents succeed in their quest to secure an enclave, they could further unsettle the already volatile Middle East and serve as a magnet for jihadists from around the world - much like al-Qaida attracted extremists in Taliban-ruled Afghanistan.
In an interview with CBS' Face The Nation, US president Barack Obama warned that the Islamic State could grow in power and destabilise the region.
Washington, he said, must remain "vigilant" but would not "play whack-a-mole and send US troops ... wherever these organisations pop up".
US secretary of state John Kerry, in the Jordanian capital Amman, said the Islamic State was a "threat not only to Iraq, but to the entire region".
The US is looking for ways to work with Middle Eastern nations, most of them led by Sunni governments, to curb the Sunni militant group's growth.
Officials in the United States and the Middle East have suggested privately that Mr Maliki must leave office before Iraq's Sunnis will believe that their complaints of marginalisation by the Shiite-led government in Baghdad will be addressed.
Mr Maliki, in office since 2006, has shown no sign he is willing to step down, but has been uncharacteristically silent since Mr Obama and Iraq's top Shiite cleric urged the prime minister last week to form an inclusive government that promotes the interests of all ethnic and religious groups.
Iraq's newly-elected parliament must meet by June 30, when it will elect a speaker and a new president, who, in turn, will ask the leader who enjoys the support of a simple majority in the 328-seat chamber to form a new government.
Mr Maliki's State of the Law won 92 seats, more than any other group, but not enough to form a government.
The militants' stunning battlefield successes in the north and the west of Iraq have laid bare the inadequacies of the country's US-trained forces and their inability to defend the rapidly shrinking territory they hold.
In the north, troops fled in the face of the advancing militants, abandoning their weapons, vehicles and other equipment. In some cases in the west, they pulled out either when the militants approached or when they heard of other towns falling.
Chief military spokesman Lt Gen Qassim al-Moussawi spoke of tactical withdrawals to regroup and prepare to retake what has been lost to the militants.
"We have a very, very serious crisis to deal with," said a senior government official close to Mr Maliki's inner circle. "Up until now, we don't have a plan to retake any territory we lost. We are working on one still."
A top Iraqi military intelligence official was equally blunt, saying the battlefield setbacks in Iraq's restive western Anbar province and the north gave the militants much more freedom of movement and their fire power had dramatically increased.
"Their objective is Baghdad, where we are working frantically to bolster our defences," said the official. "I will be honest with you, even that is not up to the level of what is needed. Morale is low."
It is not clear whether Mr Obama's deployment of up to 300 military advisers to retrain Iraqi troops could make a difference or turn things around quickly enough to prevent the militants from digging in and improving their defences. Mr Obama has also left the door open for air strikes.
Iran's supreme leader, Ayatollah Ali Khamenei, said he was opposed to any US involvement in the Iraqi crisis, accusing Washington of fomenting the unrest.
His comments appeared to quash recent speculation that the two rivals might co-operate in addressing the shared threat posed by the Islamic extremists.
"We strongly oppose the intervention of the US and others in the domestic affairs of Iraq," Ayatollah Khamenei, who has the final say over Iran's state policy, said, in his first reaction to the crisis.
"The main dispute in Iraq is between those who want Iraq to join the US camp and those who seek an independent Iraq."
"The US aims to bring its own blind followers to power," added the ayatollah, whose Shiite, non-Arab nation has close ties with Mr Maliki's government and effectively plays the role of guarantor for Iraq's Shiite political domination.
The US has long accused Iran of meddling in Iraq, including organising and backing Shiite militias following the 2003 invasion.
For now, however, the militants are on a seemingly unstoppable offensive.
Yesterday their military advances took the conflict in Iraq to the doorstep of Jordan, a key US ally that also borders embattled Syria to its north.
The capture of crossings bordering Jordan and Syria follows the fall on Friday and Saturday of the towns of Qaim, Rawah, Anah and Rutba, all of which are in Sunni-dominated Anbar province, where the militants have since January controlled the city of Fallujah and parts of the provincial capital, Ramadi.
Rutba is on the main highway from Baghdad to the two border crossings and the capture of the crossing into Jordan has effectively cut the Iraqi capital's main land route to its neighbour. It is a key artery for passengers and goods and has been infrequently used in recent months because of deteriorating security.
The taking of Rawah on the Euphrates River and the nearby town of Anah appeared to be part of a march towards a key dam in the city of Haditha, the destruction of which would damage the country's electrical grid and cause major flooding. The military has dispatched reinforcements to the dam's site to protect it.