According to a statement from Iraq's Joint Operations Command, "The Daesh terrorist gangs tried to block the advance of our forces by using shells filled with toxic chemical material, but the effect was limited," Europe1 reported.
It has been reported that Daesh used chemical weapons in the past, though their use of bombs and bullets has been far deadlier, AFP reported.
The news comes as Washington repeatedly accuses Damascus of a gas attack on Syria's Idlib, though no definitive proof has been furnished. US President Donald Trump used the accusations as a justification for a massive airstrike on the Shayrat air base, operated the Syrian Arab Army.
Syrian leadership has staunchly denied the use of toxic substances against civilians. The Russian Defense Ministry also said that Damascus did not use chemical weapons since the Assad government destroyed these armaments under a deal brokered by Moscow and Washington in 2013.
Saturday's chemical weapons attack by Daesh did not cause any deaths but did result in what were termed "limited injuries," according to the Iraq Joint Operations Command statement.
It has not been revealed whether the chemical weapon attack took place within Mosul, or outside of the besieged city.
Currently, Iraqi forces are in the process of taking west Mosul from Daesh, after liberating the eastern portion of the city earlier this year.