This week’s fighting in Syria has seen major changes for the self-proclaimed Islamic State’s grip there, leaving some in the Pentagon wondering if ISIS is trying to expand its territorial hold or is in its last throes.

This week, Kurdish forces pushed the terror group out of two cities—al Thawrah and Ash Shaddadi—that sit on supply routes for ISIS’s de facto Syrian capital, Raqqa. In Ash Shaddadi, Kurdish forces received substantial U.S.-led coalition airstrike support.

At the same time, ISIS appears to be making strides toward taking new cities in western Syria. The terror group has aggressively fended off a months-long Russian-led attempt to reclaim the central city of Palmyra, a city that many believe could serve as ISIS’s entrée into western Syria. And ISIS claimed responsibility for a series of deadly bombings Sunday in the city of Homs and the southern outskirts of Damascus that killed at least 200 people, potentially signaling its move on those cities.

Is ISIS trying to broaden its area of control to make fighting harder for both Russian- and U.S.-backed forces? Or is it losing ground around its capital and looking for any city in Syria where it can grow?

Defense officials are cautiously hopeful that it’s the latter, noting that the number of ISIS fighters continues to fall. The latest Pentagon estimate is that the terror group’s ranks stand at 15,000, the lowest of the war.

“They are shifting the fight toward territory that is fruitful,” one Defense official explained to The Daily Beast. “The more we show they are indeed not a state the more we are undermining their narrative.”

On the other hand, if ISIS gains more territory in Syria, even with fewer fighters and in the face of thousands of coalition strikes, it would solidify the group’s grip on that country. Moreover, such gains would stretch the Russian and coalition forces’ air campaign against them.

Should ISIS continue to hold Palmyra and win Homs, for example, it would put it far closer to parts of Syria still under control of Syrian President Bashar al-Assad. Russia would then be forced to expand its war over every corner of the country, and the already stretched U.S. coalition would be hard-pressed to fight ISIS on so many fronts.

Either way, recent fighting has marked one of the most dramatic shifts for the group’s territorial hold in months.

“ISIS is choosing where to stand and fight,” said Jennifer Cafarella, a fellow at the Washington, D.C.-based Institute for the Study of War, who studies the Syrian conflict.

ISIS appears to have calculated that it would rather take on Syrian Army ground forces, backed by Russian airstrikes, than Kurdish forces backed by U.S.-led forces, defense officials and watchers of the conflict have concluded.

“ISIS is prioritizing fighting the Syrian regime over Kurdish forces. We are at the beginning of that trend,” Cafarella said. “They are ceding territory in the north while consolidating in central Syria and positioning themselves in the west.”

In the northeastern city of Ash Shaddadi, for example, ISIS put up a moderately aggressive fight against the Kurdish forces on the ground and the coalition airstrikes, so much so that Pentagon spokesman Navy Capt. Jeff Davis said the town is starting to “crumble” from ISIS control.

In Palmyra, ISIS has fought for months against a daily Russian bombardment and a heavy Syrian Army ground force effort—and has yet to make any major gains there.

“They have not gained a single inch,” a second defense official explained.

Yet, no one at the Pentagon is willing to openly celebrate. ISIS has been strategically savvy throughout the war, while the U.S. has made several pronouncements that ended up being miscalculations about the group—and how to fight it. What the Pentagon sees as ISIS carrying out a new strategy could instead be ISIS grasping for any land it can.

Moreover, while ISIS has lost ground in central Syria, it conducted more strikes overall since the Russian strike campaign began last fall, according to at least one estimate.

On Wednesday, for example, ISIS reportedly escalated its campaign in the city of Khanaser, near Aleppo, despite Russian airstrikes, cutting off a Syrian Army supply route.

Most importantly, it is not clear how much danger Raqqa is in of falling out of ISIS hands, even with the loss of supply lines. That ISIS did not fight aggressively for those cities suggests that maybe it didn’t need the supply lines as much as fighters had anticipated. And there is no indication that the Kurds are willing to fight for the Arab-dominated city. Rather, Kurdish fighters appear motivated to take cities near Raqqa where Kurds live.

“ISIS is in trouble. It’s a question of how much trouble they are in and how resilient they are,” said Daveed Gartenstein-Ross, a senior fellow at the Washington, D.C.-based Foundation for Defense of Democracies.

The U.S. and Russia agreed Monday to a partial truce in Syria that takes effect Saturday, giving both Russia and the U.S. days still to strike the terror group and potentially shift the landscape of the war yet again.

In addition to reducing the fighting, the truce is intended in the near term to get humanitarian aid to civilians trapped between the fighting, and eventually to open talks for the end of the war. On Wednesday, the United Nations delivered its first airdrop of humanitarian aid to the eastern city of Deir al-Zour, which is dominated by ISIS.

In addressing the partial truce, President Obama, who spoke Wednesday from the Oval Office during a state visit with Jordan’s King Abdullah II, said he was “cautious about raising expectations” about a potential truce, and an end to the war.

“The situation on the ground is difficult, but we have seen modest progress over the course of the last week or so with respect to humanitarian access to populations that are threatened,” Obama said.