BAGHDAD (Reuters) - A leader of the Islamic State in Iraq and Syria (ISIS) has been killed in an air strike in the northern Iraqi city of Mosul, residents and a local medical source said on Thursday.

They said Radwan Taleb al-Hamdouni, who they described as the radical militant group's leader in Mosul, was killed with his driver when their car was hit in a western district of the city on Wednesday afternoon.

The ultra-hardline ISIS swept through northern Iraq in June almost unopposed by Iraq's army, consolidating on gains made in the country's Sunni heartland region of Anbar.

Hamdouni was buried later on Wednesday. Large numbers of supporters, some carrying black ISIS flags, attended the funeral, one source said.

He had been the group's 'wali', or governor, of Mosul, which was captured by the group in June and remains the largest city in a self-declared Islamic State caliphate straddling the border between northern Iraq and eastern Syria.

The United States, backed by some Western and Arab allies, launched air strikes against ISIS in Iraq in August, later expanding operations to targets in Syria.

The air campaign, which Washington says aims to degrade Islamic State's military capability, helped Kurdish forces retake territory from the group in Iraq and defend the Syrian border town of Kobane from an ongoing ISIS offensive.

Islamic State fighters faced another setback this week when Iraqi officials said they had broken a five-month siege of the Baiji oil refinery - Iraq's largest - on Tuesday.