The group of nations battling Islamic State is on course to eradicate of the radical terrorist group from Iraq and Syria, according to US Secretary of State John Kerry on Thursday.
Islamic State has been driven from nearly half its territory in Iraq and 20 per cent of its Syria holdings in the last two years, Kerry told senior diplomatic and defence coalition representatives of the 40-nation alliance in Washington.
"Today, we can look forward without exaggeration, to a time when Daesh is driven completely out of Iraq and Syria," he said, using an Arabic term for Islamic State.
The ministers said recent terrorist attacks, including the one in Nice, France last week, "have only cemented our common resolve to destroy Daesh and the toxic ideology that inspires its followers and sympathizers."
The statement said Islamic State has lost leaders at a high rate, has lost large numbers of fighters and seen its recruiting drop to the lowest level since the conflict began.
The group also is under increasing financial pressure, the statement said, forcing it to cut fighters' pay by half in some areas and turn to taxation and extortion for funding.
Kerry called the planned liberation of the Iraqi city of Mosul as a possible "critical turning point" to deprive the militants of their base of operations. The city of 1 million has been under Islamic State control since June 2014.
German Foreign Minister Frank-Walter Steinmeier said a successful liberation of Mosul would be a "decisive blow."
However, Kerry warned, Islamic State will remain a formidable danger even if it loses its self-described caliphate in Iraq and Syria.
Islamic State "is resilient and realistic enough to know when it needs to change," he said.
"So what we are seeing now is a concerted effort by Daesh to transform itself ... from a phony state into some kind of global network whose only real purpose is to kill as many people as it can in as many places as possible."