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Security forces guarding the mission fired on the car, which exploded before reaching the consulate compound.
US Deputy Assistant Secretary of State for Iraq and Iran Brett McGurk confirmed the attack in a Tweet on Friday.
The State Department later said that none of its staff were injured in the explosion, believed to have been caused by a suicide bomber in his vehicle.
Kurdish officials said that only the three ISIL attackers were killed in the explosion, but local media cited eyewitness reports which said that two civilians and a guard outside the consulate were also killed.
Gunshots were reported soon after the explosion.
A statement from ISIL on Twitter on Friday claimed responsibility for the attack.
The attempted attack on the US Consulate is the first of its kind launched by ISIL against American installations in Iraq.
Erbil is the home of hundreds of US diplomats and support staff who were moved there after ISIL swept through Iraq’s north and at one point appeared to directly threaten the capital Baghdad.
Erbil is also considered the safest city in Iraq, secured by local Kurdish Peshmerga paramilitary forces who have been able to recapture some territory from ISIL in the north of the country.
The explosion is only the second in Erbil since ISIL seized control of Mosul and other key towns in the north in June 2014.
ISIL siege of Ramadi
Meanwhile, ISIL forces continued their campaign to capture Ramadi, the capital of Anbar province, from the Iraqi military as tens of thousands of civilians fled the fighting.
Iraqi and some US officials have warned that the city, 110 kilometers northwest of Baghdad and 400 kilometers south of Irbil, could soon fall to ISIL.
ISIL fighters were reported to have captured a number of towns in Anbar province, executing many Sunni tribal members along the way.
On Friday, US Republican Senators John McCain and Lindsey Graham criticized Washington’s lackluster response to the ISIL offensive.
“Disregarding the strategic importance of Ramadi is a denial of reality and an insult to the families of hundreds of brave young Americans who were killed and wounded during the Surge fighting to free Ramadi from the grip of Al-Qaeda,” the senators said in a written statement released by McCain’s office.
The fall of Ramadi would deliver a blow to the Iraqi government’s claim that it had ISIL on the run since its forces and Shia militias captured Tikrit earlier this month.
On Friday, the Iraqi government announced that it would conduct DNA testing on the corpse of an ISIL commander believed to be the renegade Izzat Ibrahim Al Douri, a senior lieutenant of Saddam Hussein, the executed former president of Iraq.
The man strongly suspected of being Al Douri was killed during a government military campaign north of Tikrit.
The BRICS POST with inputs from Agencies