NEW YORK • Its de facto capital is falling. Its territory has shrivelled from the size of Portugal to a handful of outposts. Its surviving leaders are on the run.
But rather than declare the Islamic State in Iraq and Syria (ISIS) and its virulent ideology conquered, many Western and Arab counter-terrorism officials are bracing themselves for a new, lethal incarnation of the militant group.
The organisation has a proven track record as an insurgency able to withstand major military onslaughts, while still recruiting adherents around the world ready to kill in its name. Nor does it need to govern cities to inspire so-called lone-wolf terrorist attacks abroad, a strategy it has already adopted to devastating effect in Manchester, England, and Orlando, Florida.
"Islamic State (in Iraq and Syria) is not finished," said Mr Aaron Zelin, who studies Islamist militant movements at The Washington Institute for Near East Policy. "ISIS has a plan, and that is to wait out their enemies locally in order to gain time to rebuild their networks while at the same time provide inspiration to followers outside to keep fighting their enemies farther away."
In Iraq, where the group that became ISIS took root, security officials are bracing themselves for future waves of suicide attacks against civilians. And even if governments are able to head off organised plots like the Paris attacks of 2015, officials around the globe concede that they have almost no way of stopping lone-wolf assaults inspired or enabled by ISIS propaganda that lives online.
The group's ability to weld religious fervour to the political resentments of disenfranchised Sunni Muslims in Shi'ite-dominated Iraq already saved it once, when it appeared broken by the US military surge in Iraq in 2007 and 2008.
By the time US forces withdrew from Iraq in 2011, intelligence officials estimated that ISIS' predecessor, then called the Islamic State of Iraq, was down to its last 700 fighters. The group was considered such a minor threat that the reward offered by the US for the capture of its leader plummeted from US$5 million to US$100,000.
It took less than three years for those beaten-down and diminished insurgents to regroup and roar across Iraq and Syria, declaring an Islamic caliphate from the Mediterranean coast of Syria to nearly the Iraqi capital, Baghdad.
The group now has 6,000 to 10,000 fighters in Iraq and Syria, the US-led coalition said last Friday. That is eight to 14 times the number it had in 2011. It has also developed a powerful social media network that allows it to spew propaganda, claim responsibility for terror attacks, and not just inspire attacks but also help plot and execute them remotely.
It is also premature to assert that ISIS is running out of territory. While its footprint has shrunk in Iraq and Syria, it still controls close to 10,360 sq km along the Euphrates River Valley on both sides of the Iraq-Syria border.
At the same time, ISIS branches in North Africa and Asia are still launching operations, and its camps in eastern Afghanistan remain largely intact despite recent US air strikes. Some areas that were previously declared liberated have also seen a return of ISIS fighters. And far from its roots in the Middle East, the group continues to grow in other corners of the world, including in the Philippines and West Africa.
Even if ISIS does decline, other organisations are poised to fill the vacuum. Al-Qaeda, whose appeal to young fighters had been largely eclipsed by the tech-savvy caliphate of ISIS, is vying for a comeback.
Meanwhile, Saudi Arabia, the birthplace of Islam, is to monitor interpretations of Prophet Mohammad's teachings to prevent them from being used to justify violence or terrorism. In a decree, King Salman ordered establishment of an authority to scrutinise uses of the "hadith" - accounts of the sayings, actions or habits of the Prophet.