The al-Qaeda-inspired insurgent group that has seized a string of cities in Iraq is rapidly gaining strength as it accumulates new weapons, fighters and cash, according to US intelligence assessments disclosed by a senior American official.
The Islamic State of Iraq and the Levant (ISIL) "is the strongest it has been in several years" because of recent gains in both those countries, the senior US intelligence official said.
This assessment suggests the former al-Qaeda affiliate has rebuilt much of the capability it had at the height of the war in Iraq.
The description of ISIL, also known as Isis, underscores the challenge facing the Obama administration as it seeks to shore up a beleaguered Iraqi government that has alienated much of the country's population and watched its armed forces flee Mosul and other cities when confronted by insurgents.
The White House has sent as many as 300 US special operations troops to Iraq to help coordinate the government's efforts to counter the ISIL assault.
The US official said that American intelligence agencies had for months provided "strategic warning" that ISIL was growing in strength while the government in Baghdad appeared to be losing its grip on key cities.
Combating the insurgent group would be substantially more difficult now that it had taken hold of territory in Iraq and amassed new resources, the official stressed.
He was speaking on condition of anonymity in a conference call arranged by the Office of the Director of National Intelligence.
The military capabilities of ISIL "have dramatically improved as the group has gained access to advanced weapons from Syrian and Iraqi bases they have overrun", the US official said. The official declined to answer whether any of those weapons would pose a threat to US aircraft.
Seizing banks in Mosul added to the ISIL stockpile of cash "but probably to the tune of millions, not hundreds of millions of dollars", as had been reported in recent weeks, the official said.
Still, the official described ISIL as a deep-pocketed organisation that collects millions of dollars in illicit revenue each month through criminal acts including kidnapping and extortion.
Money from outside donors "pales in comparison to their self-funding", the official said. "They are merciless in shaking down local businesses for cash."
The official said the organisation probably numbered about 10,000 fighters, including 3,000 to 5,000 foreign fighters.
Its ranks have been temporarily bolstered by alliances with Sunni tribes and groups alienated by Iraq's Shiite-led government, but the official described those alliances as "relationships of convenience" that could fade.
ISIL has "at least some aspirations and intent to target or to threaten US interests", the official said, but added that "we believe at this time it is focused on its operations in Iraq and Syria".