Outraged Sunni lawmakers withdrew from negotiations to form a new government, saying they would not return until those behind the attack were arrested, two party officials told CNN.
But the United States and the United Nations called on Iraq to continue its efforts to form a united government.
U.S. 'understands the threat'
U.S. President Barack Obama has authorized targeted airstrikes to protect U.S. personnel in Iraq -- including military advisers -- as well as minorities being brutalized by ISIS.
And U.S. officials have said that Washington is mulling the possibility of going after ISIS fighters in their stronghold in eastern Syria.
But Pentagon spokesman Rear Adm. John Kirby would not confirm concrete plans. "We don't telegraph our punches," he said.
"I'm not going to get ahead of planning that hasn't been done or decisions that haven't been made," Kirby said.
ISIS vows retribution for killings
ISIS made threats over battle losses on Friday.
More than 50 of its fighters were killed while defending the large ISIS-held town of Jalawla "against the Peshmerga (Kurdish) mercenaries," it said on Twitter. A subsequent tweet said the group vowed revenge.
Iraqi and Kurdish forces surrounded Jalawla and took back several nearby villages in Diyala province, a spokesman for Kurdish forces said.
The Peshmerga and Iraqi commandos inflicted heavy losses against ISIS in those battles, military officials said.
In neighboring Salaheddin province, also north of Baghdad, Iraqi helicopters killed 30 ISIS fighters in the town of Dhuluiya, about 70 kilometers northeast of Baquba, Iraqi security officials told CNN.
More U.S. airstrikes near Mosul Dam
Meanwhile, U.S. military forces have conducted more airstrikes against the militants, primarily ISIS-driven vehicles, near Mosul Dam, the Pentagon said.
Since August 8, the U.S. military has carried out 94 airstrikes, 61 of them in support of Iraqi forces near the Mosul Dam, according to the Defense Department.
The dam is the largest in the country, and Iraqi and U.S. officials fear that a breach in the dam would threaten the lives of millions of Iraqis who live downstream in Mosul and Baghdad.
The U.S. airstrikes have continued despite a threat by ISIS to kill another American hostage.
Earlier this week, ISIS posted an online video showing the execution of American journalist James Foley. The group threatened the life of another man, identified as American journalist Steven Sotloff, if the United States didn't end airstrikes in Iraq.