Dozens of Daesh militants were killed in the operation to push back the terrorists, many of whom wore suicide vests, the commander told Reuters.
Residents said the militants seized a number of blocks in the Danadan district of the northern Iraqi city before being driven out in fierce clashes.
"Terrorists came from the Old City and attacked our forces using mortars and sniper shots. They managed to temporarily seize some buildings but we forced them to retreat after shelling their positions," said a federal police officer.
Another federal police officer said an operation was still underway to chase some Daesh militants who might still be hiding in some buildings.
Iraqi forces on Tuesday reported progress in their campaign to dislodge the terror group from Mosul, announcing the capture of Zanjili, a district just north the city's historic center.
The Daesh-held enclave in Mosul has shrunk to two districts along the western banks of the Tigris river - the densely populated Old City center and the Medical City.