An aerial view of the destroyed landmark al-Nuri mosque in the Old City of Mosul, Iraq. Credit:AP But soldiers on the ground say there are still pockets of territory to reclaim from the terrorist group. First Sergeant Marwan Fawzi, from the elite "Golden Division" of Iraq's special forces, said there was still a front line and a battle to conduct, but

that the end of the war with IS was "approximately" here. Like many at the Mosul base, he predicted the operation should end in another few days. "I don't think it's too early [to announce Mission Accomplished]," he said. "We've got the mosque, it's where IS declared the caliphate, and from

a military perspective, it's fallen."

IS fighters in a commandeered Iraqi security forces armoured vehicle parading down a road in Mosul back in 2014. Credit:AP IS still controls territory west and south of the city, ruling over hundreds of thousands of people. Its de facto capital in Syria, Raqqa, is also close to falling. A US-backed Kurdish-led coalition besieging Raqqa on Thursday fully encircled it after closing the militants' last way out from the south, the British-based Syrian Observatory for Human Rights monitoring group said. These setbacks have reduced Islamic State's territory by 60 per cent from its peak two years ago and its revenue by 80 per cent, to just $US16 million a month, said IHS Markit, an analytics firm.

"Their fictitious state has fallen," an Iraqi military spokesman, Brigadier-General Yahya Rasool, told state TV. However, it still occupies an area as big as Belgium, across Iraq and Syria, according to IHS Markit. IS fighters blew up the medieval mosque and its famed leaning minaret a week ago as US-backed Iraqi forces started a push in its direction. Their black flag had been flying from al-Hadba ("The Hunchback") minaret since June 2014. Much of the mosque and its brickwork minaret was reduced to rubble, said a Reuters TV reporter who went to the site with the elite units that captured it. Only the stump of the Hunchback remained, and a green dome of the mosque supported by a few pillars which resisted the blast, he said. The mosque grounds were off limits as the insurgents are suspected to have planted booby traps.

Abadi "issued instructions to bring the battle to its conclusion", by capturing the remaining parts of the Old City, his office said. The cost of the fighting has been enormous. In addition to military casualties, thousands of civilians are estimated to have been killed. About 900,000 people, nearly half the prwar population of the northern city, have fled, mostly taking refuge in camps or with relatives and friends, according to aid groups. Those trapped in the city suffered hunger, deprivation and IS oppression as well as death or injury, and many buildings have been ruined. Arduous task

Counter Terrorism Service (CTS) troops captured the al-Nuri Mosque's ground in a "lightning operation" on Thursday, a commander of the US-trained elite units told state TV. CTS units are now in control of the mosque area and the al-Hadba and Sirjkhana neighbourhoods and they are still advancing, a military statement said. Other government units, from the army and police, were closing in from other directions. An elite Interior Ministry unit said it freed about 20 children believed to belong to Yazidi and other minorities persecuted by the jihadists in a quarter north of the Old City which houses Mosul's main hospitals. A US-led international coalition is providing air and ground support to the Iraqi forces fighting through the Old City's maze of narrow alleyways.

But the advance remains arduous as IS fighters are dug in the middle of civilians, using mortar fire, snipers, booby traps and suicide bombers to defend their last redoubt. The military estimated up to 350 militants were still in the Old City last week but many have been killed since. They are besieged in one square kilometre making up less than 40 per cent of the Old City and less than one per cent of the total area of Mosul, the largest urban centre over which they held sway in Iraq and Syria. Those residents who have escaped the Old City say many of the civilians trapped behind IS lines - put last week at 50,000 by the Iraqi military - are in a desperate situation with little food, water or medicines. "Boys and girls who have managed to escape show signs of moderate malnutrition and carry psychosocial scars," the United Nations Children's Fund UNICEF said in a statement.

Thousands of children remain at risk in Mosul, it said. IS leader Abu Bakr al-Baghdadi proclaimed himself ruler of all Muslims from the Grand al-Nuri Mosque's pulpit on July 4, 2014, after the insurgents overran swathes of Iraq and Syria. His speech from the mosque was the first time he revealed himself to the world and the footage broadcast then is to this day the only video recording of him as "caliph". He has left the fighting in Mosul to local commanders and is believed to be hiding in the border area between Iraq and Syria, according to US and Iraqi military sources. The mosque was named after Nuruddin al-Zanki, a noble who fought the early Crusaders from a fiefdom that covered territory in modern-day Turkey, Syria and Iraq. It was built in 1172-73, shortly before his death, and housed an Islamic school.

Loading The Old City's stone buildings date mostly from the medieval period. They include market stalls, a few mosques and churches, and small houses built and rebuilt on top of each other over the ages. Reuters, with Michael Bachelard