Marine Gen Joseph Dunford, chairman of US joint chiefs of staff, said the group’s capability to deliver chemical weapons was rudimentary.

But the attack, he added, was a “concerning development”, reported the BBC.

No one was injured in Tuesday’s blast near an airfield by the northern town of Qayyarah and no one showed any immediate signs of exposure to the suspected mustard agent, the official said.

Several hundred US troops are working with Iraqi partners to strengthen the airfield ahead of a push on the IS stronghold of Mosul.

AFP adds: The defense official, speaking on condition of anonymity, said an incoming round had exploded within the base perimeter during an “indirect fire” attack.

Read: Islamic State faces uphill ‘branding war’ in Afghanistan, Pakistan

A small team of US troops later inspected the fragmented ordinance and found one bit with a suspicious, tar-like black oily substance that they tested in the field.

That initial test was positive for a “mustard agent.” A second test was negative, and a third sample has been sent to a proper laboratory for definitive analysis.

The official downplayed the seriousness of the incident, saying the shell would have been “militarily ineffective.”

“Our concern is not much greater after seeing this,” he said.

Still, the troops who handled the fragments went through a standard decontamination procedure.

US-led coalition warplanes last week destroyed a factory near Mosul suspected of being used by IS to make chemical weapons.

Observers have repeatedly alleged IS has used chemical weapons, and the Pentagon has confirmed the jihadists have deployed chlorine and sulfur mustard devices.

Iraqi security forces, backed by coalition air power, are in the final weeks of “shaping” operations ahead of an assault to recapture Mosul, which IS seized in 2014 and which remains the jihadists’ last main stronghold in Iraq.