Another battle and another chaotic retreat has been made by Iraqi government forces, who abandoned their positions in Ramadi, the provincial capital of Anbar province, despite U.S. air support and a last-minute appeal by Prime Minister Haider al-Abadi, who called on his soldiers to “hold their positions.”

Only hours before the fall, the Baghdad government sent in reinforcements to try to contain what was a counterpunch mounted by the militants of the self-proclaimed Islamic State, formerly known as ISIS, to their defeat in Tikrit just weeks ago. Tikrit, in neighboring Salahaddin province, was the first substantial city lost by ISIS and it was hailed by U.S. and Iraqi leaders, as the start in earnest of the rollback of the militants.

U.S. officials are couching the loss of Ramadi as a setback rather than a blow, arguing they had always expected ups and downs and reversals mixed in with steady progress in the fight against the Islamic extremists and their Sunni allies in Iraq. Only on Friday, Brigadier General Thomas Weidley, chief of staff of the Combined Joint Task Force-Operation Inherent Resolve, was describing to reporters how ISIS is “on the defensive throughout Iraq and Syria,” although he cautioned that the terror army will still have “episodic successes” but they won’t “materialize into long-term gains.”

But episodic successes can soon start mounting into a pattern of wins. Despite Friday’s successful U.S. commando raid deep into ISIS territory in Syria that left as many as 40 militants dead, including three commanders, in the last few days ISIS has managed to mount powerful counterpunches more than 60 miles apart—in Iraq’s Ramadi and Syria’s Palmyra, the desert town that contains one of the world’s most important Roman heritage sites.

In Palmyra, Syrian government forces appeared at the weekend to be containing the militants, for now. And while insisting the battle for Ramadi isn’t yet over, Pentagon officials are playing down the impact of the battle there on the broader Iraq military campaign. “Ramadi has been contested since last summer and ISIL now has the advantage,” Pentagon spokeswoman Elissa Smith said, using another acronym for the Islamic State. She said the loss of the city would not mean the overall Iraq military campaign was turning to the Islamic State’s advantage, but acknowledged it would give the group a “propaganda boost.”

Scott Atran, an anthropologist who specializes in jihadi organizations, sees what even Iraqi officials acknowledge as the loss of Ramadi as more than just a propaganda boost. He accuses U.S. officials of spinning a dream world. “U.S. government and Iraqi government forces up until Saturday were saying Ramadi would never fall,” he notes.

He fumes: “Here is a group, attacked on all sides by a wide array of forces and countries, massively outnumbered, with no airpower, and unable to use their artillery because of that, having established a fully functioning state in less than a year, with functioning courts, police, customs, etc., defending a border 3,000 km long.” He continued: “While the Islamic militants’ reach has been limited in Iraq, it appears that these highly mobile Islamic State fighters who are able to switch the direction of their attacks from one side of the Syrian-Iraq border to the other, will now be targeting Syrian Kurdish forces to attract youth from 90 countries. And our government says these are weak, failed, and nihilistic gangs who are burning themselves out.”

Some may disagree with Altran’s description of the “caliphate” as a “fully functioning state.” But the Islamic extremists’ ability to counterpunch is becoming clearer. Time and again since September, when President Obama launched an air war against ISIS, the terror army has switched focus, exploiting their mobility and the lack of coordination and agreement among the various groups and countries aligned against them both to score gains and to erode the morale and confidence of their foes.

In January, taking advantage of a breakdown of a non-aggression pact between militia forces loyal to Syrian President Bashar al-Assad and Syrian Kurds, Islamic militants started to probe territory southeast of the mainly Kurdish Syrian border town of Kobani and launched an offensive on Hasakah, a strategic town in Syria’s Kurdistan that straddles roads linking ISIS-controlled Mosul in Iraq to the Syrian town of Raqqa, the de facto capital of the Islamic State.

Hasakah, Ramadi, Palmyra—they all illustrate how ISIS strikes back whenever the group takes a hit both to boost the morale of its own fighters and to give the sense it remains undefeated even when it does suffer defeats. “Carry the battle to them. Don’t let them bring it to you. Put them on the defensive,” was Harry Truman’s take on how to conduct warfare. And that is exactly how ISIS fights.

With the Ramadi assault, the ISIS planners have also set up the circumstances for more trouble for the Iraqi government in Iraq’s western Anbar province. Iraq’s prime minister is now saying he will deploy Shia militias to the city to mount a fightback—but that is likely to roil more Sunnis in a province that they dominate and undermine efforts get the tribes that are aligned with ISIS to defect.

Meanwhile, with the expansion of affiliates in Libya, Afghanistan, and Libya, and stepped up efforts to inspire terrorist activities, whether by lone wolves or more directed agents of terror, in the United States and Europe ISIS has even more options. Analyst Jonathan Schanzer of the Foundation for the Defense of Democracies, a Washington-based think tank, suspects ISIS will answer Friday’s Delta Force raid with a terror attack in the West to try to blunt the psychological warfare edge the U.S. secured with the nighttime commando assault. “Such strikes could invite more attacks here, against the homeland,” he says.