Islamic State (IS) leader Abu Bakr al-Baghdadi has been killed in a raid by US forces in Syria, President Donald Trump says.

Key points: Islamic State leader Abu Bakr al-Baghdadi detonated a suicide vest, killing himself and three children in a dead-end tunnel, Donald Trump said

Islamic State leader Abu Bakr al-Baghdadi detonated a suicide vest, killing himself and three children in a dead-end tunnel, Donald Trump said Mr Trump said he watched the raid unfold and that Baghdadi "died like a dog", while "crying, whimpering and screaming"

Mr Trump said he watched the raid unfold and that Baghdadi "died like a dog", while "crying, whimpering and screaming" An Iraqi official says that Iraqi intelligence played a part in the raid

Mr Trump said US forces chased Baghdadi into a dead-end tunnel at a compound in north-western Syria before the terrorist detonated a vest, killing himself and three children.

Mr Trump said he watched most of the raid.

"Last night the United States brought the world's number one terrorist leader to justice," Mr Trump said from the White House.

"The thug who tried so hard to intimidate others spent his last moments in utter fear, panic and dread, terrified of the American forces coming down on him.

"He reached the end of the tunnel as our dogs chased him down. He ignited his vest, killing himself and his three children. His body was mutilated by the blasts. The tunnel had caved on him."

Abu Bakr al-Baghdadi supported smaller-scale terror attacks that would be harder to prevent. ( AP: Al-Furqan media )

He called Baghdadi a "sick and depraved man" who "died like a dog" while "whimpering, screaming and crying".

Video verified by the Storyful news agency showed extensive destruction to a compound near the town of Barisha, about 40 kilometres north of the Syrian city of Idlib.

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During the night-time operation, US Special Forces soldiers spent two hours in the compound in Idlib province in north-western Syria after blowing a hole in a wall to access the building.

No American personnel were injured, but a service dog was wounded, Mr Trump said.

He said numerous members of Baghdadi's entourage were killed.

Under Iraqi-born Baghdadi's rule, Islamic State — which at one point controlled swathes of Syria and Iraq — was responsible for gruesome attacks against religious minorities on five continents in the name of a form of ultra-fanatical Islam.

Mr Trump said killing Baghdadi fulfilled the top national security priority of his administration and that he had been chasing the IS leader for three years.

The confirmation came a day after Mr Trump had tweeted that "Something very big has just happened!"

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That came on the back of comments from the Britain-based war monitor, the Syrian Observatory for Human Rights, which said nine people were killed during the two-hour raid.

A house thought to be the main target was struck from the air, and fighters then descended from helicopters and engaged in ground clashes, said the Observatory, which has a network of sources in Syria.

Rubble remains near the village of Barisha after the US Special Forces raid. ( AP: Ghaith Alsayed )

The death of Baghdadi comes weeks after Mr Trump's sudden decision to withdraw US troops from Syria sparked a wave of harsh criticism, including from fellow Republicans, that the move would lead to a resurgence of IS.

For days, US officials had feared IS would seek to capitalise on the upheaval in Syria.

But they also saw a potential opportunity in which IS leaders might break from more secretive routines to communicate with operatives, potentially creating a chance for the US and its allies to detect them.

IS leader inspired attacks in Europe and the US

Baghdadi was long thought to be hiding somewhere along the Iraq-Syria border. He has led the group since 2010, when it was still an underground Al Qaeda offshoot in Iraq.

On September 16, IS's media network issued a 30-minute audio message purporting to come from Baghdadi, in which he said operations were taking place daily and called on supporters to free women jailed in camps in Iraq and Syria over their alleged links to his group.

His exhortations were instrumental in inspiring terrorist attacks in the heart of Europe and in the United States.

Shifting away from the airline hijackings and other mass-casualty attacks that came to define Al Qaeda, Baghdadi and other IS leaders supported smaller-scale acts of violence that would be harder for law enforcement to prepare for and prevent.

At the height of its power IS ruled over millions of people in territory running from northern Syria through towns and villages along the Tigris and Euphrates valleys to the outskirts of the Iraqi capital Baghdad.

US praised for 'impressive achievement'

Many world leaders were quick to praise the actions of the United States, while Turkey claimed to play an important role in killing Baghdadi.

"Turkey was proud to help the United States, our NATO ally, bring a notorious terrorist to justice," Fahrettin Altun, a senior aide to President Tayyip Erdogan, said in a statement.

"We remember today Abu Bakr al-Baghdadi's civilian victims and our military heroes, who lost their lives to protect the world from Daesh (IS) terrorists."

Donald Trump was joined by senior military and political advisers in the Situation Room of the White House monitoring developments of the raid. ( AP: Shealah Craighead/The White House )

A senior Iraqi security official said Iraqi intelligence also played a part in the operation.

Israeli Prime Minister Benjamin Netanyahu called the mission an "impressive achievement".

"I would like to congratulate President Trump on the impressive achievement that led to the assassination of the head of (IS) al-Baghdadi. This reflects our shared determination, of the United States of America and of all free countries, to fight terror organisations and terrorist states," he said.

Mr Trump is currently the subject of a widening impeachment inquiry launched by Democrats last month.

ABC/wires