Islamic State forces are facing concentrated pressure from Iraqi and coalition forces and it's just a matter of time until they are defeated.
Vice Admiral David Johnston, the chief of Australian Defence Force joint operations, said IS, also referred to as Daesh, could still mount localised attacks.
But their capacity to launch major attacks was considerably diminished, he told reporters in Canberra on Thursday.
"Daesh now finds itself under pressure in both the Euphrates and Tigris River Valleys, as well as near Raqqa and Mosul. Coalition air attacks continue to strike at Daesh ground forces and sources of financial support across Iraq and Syria," he said.
Since the start of this year, Australian combat aircraft have conducted 110 strike missions on targets in Iraq and Syria, dropping 273 bombs.
Vice Admiral Johnston said it still remained a matter of when, not if, Islamic State was defeated.
Late last year Iraqi forces, assisted by coalition air strikes, ousted IS forces from the city of Ramadi. Iraqi forces were now moving closer to the city of Mosul which remains occupied by IS.
Territory inside Iraq is now some 40 per cent less than what it was at their peak.
Vice Admiral Johnston said it was previously estimated there were some 30,000 IS fighters in Iraq and Syria. The estimate is now around 25,000.
"Movement of fighters into the area is more difficult. Border control with Turkey have been increasingly tightened. They have had significant combat casualties which have further attrited the number of fighters available to them," he said.
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