An air strike initiated after Australian forces discovered a network of hidden caves and bunkers in Iraq has killed as many as 100 Islamic State fighters.

The attack on a network of caves and tunnels near Kirkuk was carried out about a week ago after a RAAF Super Hornet crew spotted people moving along the side of a mountain and then disappearing.

In the latest official briefing on the operation held at defence headquarters in Canberra, Vice Admiral David Johnston described how the Super Hornet's weapons systems operator observed an Islamic State militant moving to what was later discovered to be "a large well-established and hidden network of caves and bunkers that were concealed in a hillside".

Investigations confirmed that the fighters were moving underground, and within 24 hours a coalition air strike was called in.

Forty-four targets were hit, backed up by a large-scale ground offensive by Kurdish forces.

The Kirkuk attack is just one of a number of successful missions flown by RAAF Super Hornets in the past few weeks.

An Australian strike crew also took command of an operation against a factory in Mosul used to make improvised explosive devices. The factory was severely damaged.

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As well as offensive operations, Australian air crews have been involved in a continuing humanitarian mission around Mt Sinjar, along with weapons drops.

Vice Admiral Johnston said the coalition was confident the "advance of ISIL across Iraq has slowed".

"There is a momentum shift but it isn't consistent," he said.

Iraqi forces have had some success in the north and south of the country, but the western approaches to Baghdad remain fairly fragile.

Ramadi facing Islamic State offensive

A significant Islamic State push is continuing around Ramadi, and hundreds of militant fighters have been seen entering the area.

Australia's air strikes have also been instrumental in supporting Iraqi forces around the Baiji oil refinery, on the road north between Bagdad and Mosul.

The refinery is one of Iraq's largest and has been hotly contested territory with a potential to produce 170,000 barrels of oil per day at a value of up to $24 million a day.

More than 20 bombs were dropped from Australia's fighter jets in the operation, and seven targets were destroyed.

Vice Admiral Johnston said that while the Islamic State assault had not been stopped, there was no doubt that the group's leadership had been successfully targeted on a number of occasions.

Although he conceded Islamic State had the ability to regenerate its leadership he said: "Every time you lose a leader with experience, with knowledge of the area they are operating in, that's been intimately involved in planning and preparing for operations, it has an impact on forces".

Asked if he could confirm that the Australian Islamic State leader Mohammad Ali Baryalei was one of those leaders who were killed, Vice Admiral Johnston said the ADF believed it was less than likely that he was dead.

Late last month social media posts had suggested that the Australian Islamic State kingpin had been killed.

"We have not seen any categorical evidence to suggest he was dead," Vice Admiral Johnston said.