Malcolm Turnbull appears optimistic about defeating Islamic State on the battlefield, following briefings with top US defence and security officials.
"We are continuing to roll them back. and we look forward to further gains over the course of the next six months or so," he told reporters in front of the Capitol building.
"They said they were going to sweep across europe and stable their horses at the vatican, well, that's not going to happen. They are on the way out."
But he has warned the threat of lone-wolf attacks in other countries will get worse before they get better.
Fresh from wrapping up his time at the United Nation's general-assembly in New York, the prime minister met with Defense Secretary Ash Carter at The Pentagon on Thursday local time.
He was also briefed by the directors of the National Security Agency, CIA and National Intelligence.
Coalition forces are continuing to roll back the terrorists in Iraq , he said.
"We look forward to further gains over the course of the next six-months or so.
"There is a very real prospect of completing the defeat of Daesh in the battlefield, ending their so-called caliphate."
Mr Turnbull discussed timing and dates on the commitment against Daesh with Secretary Carter, but refused to discuss them publicly.
"There is real progress being made towards the recapture, the liberation of Mosul and of course Raqqa as well, but these operations will take their own course."
He stressed the importance of a political solution in Iraq, as well as Syria.
But the news wasn't all good.
"There is a concern that the lone-actor terrorist threat in countries like the United States, Australia, the West if you like will get worse before it gets better," Mr Turnbull said.
Intelligence was key to stopping lone-wolf attacks, he said.
