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TELSKUF, IraqViewed from afar, the two-mile-long Mosul Dam is an impressive sight on the flat, sunbaked northern plains.

Move closer, though, and its appearance has a menacing air. The bullet-riddled causeway and abandoned guard posts tell of the dam's seizure by Islamic State terrorists in early August, and the bomb craters and flattened armored vehicles are evidence of its recapture by Kurdish fighters 12 days later. (Related: "Refugee Flood Heightens Long-Standing Tensions Between Turks and Kurds.")

The sorry state of Iraq's biggest dam, about 31 miles (50 kilometers) northwest of Mosul city on the Tigris River, shows how water has become another weapon in the terror group's arsenal. But its steadily retreating reservoir tells another story, one of how Iraq's water shortage is growing more urgent by the day.

Built in the early 1980s to supply water, irrigate fields, control floods, and generate electricity, the dam offers an apt metaphor for the war-torn country's shaky foundation. Its dry spillways are plastered with cement to fill cracks, while the permeable gypsum base has required injections of grout to prevent its collapse since it opened.

Iraq was grappling with water woes long before the Islamic State jihadist group surged through its northwestern provinces and routed much of its army over the summer. But the sudden loss of prime agricultural land and the swift appropriation of scarce water resources have intensified the crisis.

This army of extremist Iraqis and foreign fighters, which now rules considerable territory in Syria and Iraq, has demonstrated a willingness to use water to defeat its foes. Iraqis in endangered areas whose livelihood depends on a reliable supply are panicked.

NG STAFF SOURCES: INSTITUTE FOR THE STUDY OF WAR; FAO; CIA

More Precious Than Gold

Ahmed Jemili, whose melon and mango farm in Kirkuk governorate stands about 7 miles (11 kilometers) from the front line, feels this fear keenly. Years of drought and cheap food imports have driven most neighboring farms out of business, and the grizzled Kurd's small landholding now lies isolated amid distant oil wells and a hastily constructed roadside encampment for refugees.

"For us, water is more precious than gold, and Daesh are just hoarding it," Jemili said, using an Arabic acronym for the Islamic State of Iraq and Syria, as the group initially branded itself.

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Amid Terror Attacks, Iraq Faces Water Crisis