THE US-led coalition fighting Islamic State in Iraq is investigating reports that an air strike in a western neighbourhood of Mosul left more than 100 civilians dead.

Residents of the neighbourhood known as Mosul Jidideh said scores of residents are believed to have been killed by a pair of air strikes that hit a cluster of homes in the area earlier this month.

"Over 137 people were inside. The entire neighbourhood was fleeing because of missiles that hit, so people were taking refuge here," said Ahmed Ahmed.

One air strike hit the residential area on March 13, followed by a second strike four days later, the residents said.

Reporters saw at least 50 bodies being recovered from the wreckage of the buildings. A team of Iraqi rescue engineers were working to recover the bodies on Friday, after being prevented from reaching the site for days due to fierce frontline clashes, according to one of the engineers.

The coalition has "opened a formal civilian casualty credibility assessment on this allegation", a statement said, adding that coalition planes "routinely strike" IS targets in this area and coalition forces "take all reasonable precautions during the planning and execution of air strikes to reduce the risk of harm to civilians".

Faced with their toughest fight against Isis yet, Iraqi and coalition forces have increasingly turned to air strikes and artillery to clear and hold territory in western Mosul's densely-populated western neighbourhoods.

Civilians, humanitarian and monitoring officials are warning of increased civilian casualties in western Mosul.

The United Nations reported on Thursday that more than 1,000 people have been treated for conflict-related trauma near frontlines since the fight for western Mosul began on February 19.

Frontline medics say the vast majority of civilians they treat have been hit with IS munitions such as mortars and sniper fire.

As Iraqi forces push deeper into Mosul's old city, humanitarian officials expect casualty rates to spike as more than 400,000 civilians remain trapped in the west of the city.

The Pentagon, which has yet to release casualty figures from last month's fighting, has acknowledged 220 civilian deaths from coalition air strikes in Iraq and Syria since the US campaign against IS began in 2014.

Independent monitor groups, such as the London-based Airwars, put the casualty figures much higher, at just over 2,700.