Two generals said the jihadist group had suffered the losses as troops and allied fighters, backed by US-led air strikes, advanced on several axes.
Up to 5,000 IS fighters were believed to be in Mosul ahead of the assault.
Despite the territorial gains, commanders have warned that securing Mosul could take weeks, if not months.
About 50,000 Iraqi security forces personnel, Kurdish Peshmerga fighters, Sunni Arab tribesmen and Shia militiamen are involved in the operation.
More than 100 US military personnel are embedded with them, advising commanders and helping direct coalition air strikes. Other US troops are providing fire support from nearby bases.
Lt Gen Stephen Townsend, the commander of US forces in Iraq, said on Wednesday that the coalition forces had delivered more than 2,100 aerial bombs, artillery and mortar shells, rockets and missiles since 17 October.
"This relentless campaign of strikes has removed hundreds of fighters, weapons, and key leaders from the battlefield in front of the Iraqi advance," he added.
On Thursday, the head of the US military's Central Command, Gen Joseph Votel, told the AFP news agency: "Just in the operations over the last week and a half associated with Mosul, we estimate they've probably killed about 800-900 Islamic State fighters."
The Iraqi government informed US commanders on Wednesday that 57 Iraqi soldiers had been killed and about 250 wounded. Kurdish Peshmerga fighters are thought to have suffered about 20 to 30 fatalities.
Despite the removal of hundreds militants from the battlefield, Gen Townsend warned that IS defences were likely to grow stronger the closer they got to Mosul.
The group had "used an extraordinary amount of indirect fire - mortars, artillery and rockets - and an exceptional number of VBIEDs (Vehicle-Borne Improvised Explosive Devices)," he told reporters during a visit to the Qayyarah airbase.
Fierce resistance by jihadists has held up soldiers in the Shura area, 40km (25 miles) south of Mosul, prompting elite Counter-Terrorism Service (CTS) forces to pause their advance near the village of Bazwaya, only 6km east of the city.
CTS commander Brig Gen Haider Fadhil told the Associated Press his forces would wait for other units to reach Mosul's outskirts before entering the city.
But he stressed: "The operation has not been stopped and is proceeding as planned."
Meanwhile, the World Health Organization (WHO) said it had trained 90 Iraqi medics in "mass casualty management" as part of its preparations for the Mosul operation, with a special focus on responding to chemical attacks, AP reported.
IS has previously used chemical weapons in attacks on Iraqi and coalition forces, and there are fears that it might do so again inside Mosul, where more than a million civilians live.
Some 11,700 residents have fled since the offensive began and, according to the UN's worst-case scenario, as many as 700,000 others could follow suit.
"There's been quite a dramatic upturn in the last few days," said Karl Schembri of the Norwegian Refugee Council, who warned that there were currently only spaces in camps for 60,000 people.
The WHO is working on the assumption that 200,000 of them will require emergency health services, including more than 90,000 children needing vaccinations and 8,000 pregnant women.
Hundreds of Islamic State militants are thought to have been killed since Iraqi forces launched an offensive to retake Mosul last week, the US military says.