The Turnbull government has welcomed reports the Islamic State's so-called caliphate has fallen after the liberation of the last militant-held town in Iraq but signalled the group still needs to be fought globally as a terrorist outfit.
Late on Friday, Australian time, the Iraqi military announced it had retaken the town of Rawa on the Syrian border, the final hold-out for the militant group that swept across large areas of Syria and Iraq in mid-2014, sending shockwaves around the world.
About 1000 Australian military personnel have been involved in the fight against the group for the past three years, mostly in Iraq. These have included a large RAAF contingent, about 300 army trainers and several dozen special forces "advising and assisting" the Iraqis. There is no immediate news of their withdrawal.
"The Australian government welcomes reports that the Iraqi Security Forces (ISF) have liberated Rawa on the Euphrates, the last Iraqi town under ISIS occupation," Foreign Minister Julie Bishop told Fairfax Media.
"We remain committed to defeating ISIS globally, and we are co-operating with countries in our region to identify and counter threats from returning foreign terrorist fighters."
She said Australia remained an "active member" of the global coalition to defeat the group.
But Australian authorities have long believed Islamic State will shift to an insurgency in the Middle East and a global terrorist network - similar to al-Qaeda - that plans or inspires attacks in the West.
Prime Minister Malcolm Turnbull told Parliament last year the destruction of the "caliphate" would "not mark the end of this conflict".
"It will, instead, mark the beginning of the next phase: establishing order, maintaining stability, a form of peace," he said. "And this could be an even more difficult and protracted struggle.
"Once the so-called caliphate is destroyed, it is difficult to predict how Daesh's [another name for the group] remnant forces will react and mutate."
He added that "the experience of al-Qaeda and its offshoots may be instructive".
Australia has recently committed about 80 soldiers to help train the Philippines army in urban warfare on top of helping with intelligence and maritime surveillance.
Philippines government forces in the country's south have fought a protracted urban battle against Islamic State-affiliated militants and recaptured the city of Marawi only after months of intense fighting.
That raised fears that the remnants of Islamic State might seek to create new footholds in south-east Asia.
The destruction of the "caliphate" also raised questions about the fates of Australian foreign fighters who were in Syria and Iraq. ASIO recently said about 110 Australians were still believed to be fighting with radical groups in those two countries.
