The Syrian Observatory for Human Rights claims it has "confirmed information" that Islamic State leader Abu Bakr al-Baghdadi has been killed.

The report came just days after the last sectors of the northern Iraq city of Mosul, which Baghdadi's forces overran almost exactly three years ago, were recaptured by the Iraqi army.

Russia's Defence Ministry said in June that it might have killed Baghdadi when one of its air strikes hit a gathering of Islamic State commanders on the outskirts of the Syrian city of Raqqa, but Washington said it could not corroborate the death and Western and Iraqi officials have been sceptical.

"[We have] confirmed information from leaders, including one of the first rank, in the Islamic State in the eastern countryside of Deir al-Zor," said Rami Abdulrahman, director of the British-based war monitoring group.

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Reuters could not independently verify Baghdadi's death. The Pentagon and said it had no information to corroborate the reports, and Kurdish and Iraqi officials also had no confirmation.

A senior White House adviser said the US could not immediately verify the report.

"We take any report of this nature with a large dose of salt," Sebastian Gorka, deputy assistant to President Donald Trump, told Fox News. "We will verify it. We will look at the intelligence available ... and we will give a statement when we have the requisite facts."

Baghdadi's death had been announced many times before but the Observatory has a track record of credible reporting on Syria's civil war. Islamic State-affiliated websites and social media feeds have so far said nothing.

Abdulrahman said Observatory sources in Syria's eastern town of Deir al-Zor had been told by Islamic State sources that Baghdadi had died "but they did not specify when". The sources said Baghdadi had in the past three months been present in the eastern Syrian countryside around Deir al-Zor.

The death of Baghdadi, who declared a caliphate from a mosque in the Iraqi city of Mosul in 2014, would be one of the biggest blows yet to the jihadist group, which is trying to defend shrinking territory in Syria and Iraq.

The US put up a US$25 million (NZ$34.7 million) reward for his capture, the same amount as it had offered for al-Qaeda leader Osama bin Laden and his successor Ayman al-Zawahri. It is not yet known if anybody will claim the bounty.

Baghdadi was born Ibrahim Awad al-Samarrai in 1971 in Tobchi, a poor area near Samarra, north of the Iraqi capital Baghdad.

His family included preachers from the ultra-conservative Salafi school of Sunni Islam, which sees many other branches of the faith as heretical and other religions as anathema.

He joined the Salafi jihadist insurgency in 2003, the year of the US-led invasion of Iraq, and was captured by the Americans. They released him about a year later, thinking he was a civilian agitator rather than a military threat.

It was not until July 4, 2014, that he seized the world's attention, climbing the pulpit of Mosul's medieval al-Nuri mosque in black clerical garb during Friday prayers to announce the restoration of the caliphate.

Thousands of volunteers flocked into Iraq and Syria from around the world to become "Jund al-Khilafa", or soldiers of the caliphate.

At the height of its power two years ago, Islamic State ruled over millions of people in territory running from northern Syria through towns and villages along the Tigris and Euphrates river valleys to the outskirts of the Iraqi capital Baghdad.

It claimed or inspired attacks in dozens of cities including Paris, Nice, Orlando, Manchester, London and Berlin, and in nearby Turkey, Iran, Saudi Arabia and Egypt.

In Iraq, it staged dozens of attacks targeting Shiite Muslim areas. A truck bomb in July 2016 killed more than 324 people in a crowded area of Baghdad, the deadliest attack since the 2003 invasion of Iraq.

The loss of Mosul and the siege of Raqqa, Islamic State's capital in Syria, by a US-backed, Kurdish-led force stripped Baghdadi of the trappings of caliph and made him a fugitive in the desert border area between the two countries.