Mosul, 400 km north of the Iraqi capital of Baghdad, has been under IS control since June 2014, when government forces abandoned their weapons and fled, enabling IS militants to take control of parts of Iraq's northern and western regions.
The World Health Organisation has activated, with partners and local health authorities, "an emergency response plan to safely treat men, women and children who may be exposed to the highly toxic chemical", the agency said in a statement.
"They're not going to be pushed out of Mosul - they're going to surrender or they're going to be killed there", he vowed.
Four of them are showing "severe signs associated with exposure to a blister agent".
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ISIS has used chemical weapons in Iraq and Syria at least 52 times according to a report published late past year by IHS conflict monitor, a London-based research and intelligence gathering group.
Most of western Mosul is still under Islamic State group control despite a handful of recent gains on the city's southwestern edge by Iraqi forces over the past two weeks.
Iraqi forces launched attacks against ISIS-held neighborhoods in western Mosul from three points on Sunday morning.
The militants are using suicide auto bombers, snipers and booby traps to counter the offensive waged by the 100,000-strong force of Iraqi troops, Kurdish peshmerga fighters and Iranian-trained Shi'ite Muslim paramilitary groups.
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Nazim Hamid, whose family is being treated for possible chemical weapons exposure, told AP a mortar had hit his house while he and his family were inside. "My kids were affected, some of them were burned and some of them had difficulty breathing".
Ten patients from Mosul were in a stable condition, said Hussein Qader, the deputy director of a hospital in Irbil where victims, including children, are being treated.
UN Humanitarian Coordinator in Iraq Lise Grande called for an investigation, saying there is never justification for using chemical weapons. The United Nations warned that if confirmed the alleged use of chemical weapons in Mosul in Iraq would be considered a war crime and a serious violation of global humanitarian law.
The push on Mosul's west was launched about two weeks ago after the eastern half of the city was declared "fully liberated" in January. The eastern side remains within reach of militants' rockets and mortar shells.
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IHS conflict monitor, a London-based research and intelligence group found that Islamic State has used chemical weapons in Iraq and Syria at least 52 times, and that at least 19 of the 52 attacks took place around Mosul.