About two weeks ago, USA -backed Iraqi forces started a major offensive to drive Islamic State out of the western section of Mosul, nearly a month after they forced the militant group out of the eastern side of the city.
The International Committee of the Red Cross (ICRC) said on Friday five children and two women were receiving treatment for exposure to chemical agents.
The suspected attack occurred in eastern Mosul, one of the first areas of the city to be retaken by Iraqi forces in January after the Mosul offensive was launched in October. "This is frightful", Lise Grande, the humanitarian coordinator in Iraq said in the statement, "there is never justification-none whatsoever-for the use of 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 worldwide humanitarian law.
The International Organization for Migration's Mosul Displacement Tracking Matrix showed the number of people uprooted since the start of the offensive in October exceeded 206,000 on Sunday, up from 164,000 on February 26.
Hala Jaber, a spokeswoman for the agency's operations in Mosul, said most of the families who recently fled western Mosul were taken by government buses and trucks to the Hamam al-Alil area, southwest of Mosul. The UN, which has been providing shelter, food and other assistance to Iraqis who have fled Mosul during the almost five-month-long battle, said it is working as fast as possible to help those displaced.
Defeating ISIL, or the Islamic State of Iraq and the Levant, in Mosul would crush the Iraqi wing of the armed group.
They were also reported to have fired rockets and mortar rounds filled with toxic agents from the western side of the city to the eastern, government-controlled side. The symptoms include blisters, redness in the eyes, irritation, vomiting and coughing.
On Saturday, Iraq's minister of displacement and migration criticised UN-led efforts to aid those displaced by the fighting, while the United Nations said that such assistance is the "top priority". Up to 700,000 people are believed to remain in the city.