IS has cost Iraq 'more than $100 billion', says PM Abadi

The Islamic State group's occupation of northern Iraq and the battle to defeat it has caused more than $100 billion worth of damage, Prime Minister Haider al-Abadi said on Saturday.

"The damage caused by the IS occupation of Iraqi cities already amounts to more than $100 billion," Abadi said, speaking during a visit to Karbala, a city holy to Shia Muslims, where millions of pilgrims gathered to mark the annual Arbaeen commemoration on Friday.

"That's just the damage to the economy and infrastructure."

"The damage caused by the IS occupation of Iraqi cities already amounts to more than $100 billion," Abadi said.

"That's just the damage to the economy and infrastructure."

IS seized around a third of Iraq and parts of Syria in a sweeping 2014 advance.

But its self-declared "caliphate" has since been decimated by multiple offensives and squeezed into a pocket of territory on the Iraqi-Syrian border.

Iraqi forces launched an operation to retake the last IS-held towns in Iraq on Saturday, including the Euphrates valley town of Rawa and nearby villages.

The assault also aims to "clean open areas in the desert" of western Iraq, said Abadi, who is also head of the armed forces.

Home to around 8,900 people, mostly from Sunni tribes, Rumana is located on the north side of the Euphrates in west Anbar Governorate.

Rawa is the last town still held by IS apart from Albu Kamal, al-Qaim's twin town just across the Syrian border where the jihadists were still battling Damascus troops and allied forces on Saturday after mounting a surprise counterattack late on Thursday.

The recapture of the Rawa pocket would mark the final battleground defeat of IS in Iraq and sound the death knell of the “caliphate”.

Many of the group's top leaders have been killed as Syrian and Iraqi forces with backing from Russia, Iran and a US-led coalition rolled back the territorial losses that saw the militants declare a "caliphate" roughly the size of Britain.

But the whereabouts of the first among them, self-proclaimed "caliph" Abu Bakr al-Baghdadi, remains unclear. He has been reported killed or wounded many times but IS has never offered any confirmation.