Here is a quick look at the insurgent group and why it is raising concern:
1. The organisation was originally led by Abu Musab al-Zarqawi, a Jordanian and a convicted thief before he turned to radical Islam and formed his group of fighters drawn from Iraq and a region known in Arabic as the "al-Sham" or the Levant, that is Palestine, Lebanon and Syria.
2. In 2004, the group, then known as the Al Qaeda in Iraq, pledged allegiance to Al Qaeda. But differences persisted between Zarqawi and Osama bin Laden's key adviser Ayman al-Zawahiri. Zarqawi's campaign was known for its savagery and targeting of Shi'ites in Iraq. Zawahiri counselled against beheadings and killing of Shi'ites.
3. Zarqawi was killed in 2006. And efforts mounted to rein in his followers. But the outbreak of war in Syria provided fresh opportunity for the group.
4. The group's emir now is Abu Bakr al-Baghdadi, who claims to be a direct descendant of Prophet Mohammed. He took over in 2010 and the group now calls itself the Islamic State in Iraq and al-Sham (ISIS).
5. In 2011, it managed to free hundreds of Iraqi prisoners and began a campaign to strengthen itself by inducting several young fighters.
6. Its goal is still to establish a hardline Sunni Islamic state. Some experts say it could become deadlier than the Al Qaeda in its present state. ISIS still retains influence over parts of Syria, controlling some of the eastern oilfields. ISIS uses revenue from these oilfields to fund its insurgency operations.
7. In Iraq, the group's major breakthrough was a capture of the city of Mosul earlier this month. Parts of Tikrit, Saddam Hussein's hometown which is 152.8km from Baghdad, are now said to be under its control.
8. Gains by the militants, including the siege of Iraq's biggest oil-refinery at Baiji, despite the presence of thousands of security troops, have led to concerns about future moves by the insurgents and their likely impact on oil prices.
Source: Washington Post, BBC, Guardian, Institute for the Study of War