Americans kidnapped in Iraq last month released

BAGHDAD (Reuters) – Three U.S. citizens who were kidnapped in Baghdad last month have been released, an official in Iraq’s Interior Ministry and a senior government source said on Tuesday.

Unknown gunmen seized the trio from a private apartment in the capital’s southeasterly Dora district in mid-January.

U.S. and Iraqi sources said at the time that they were being held by an Iranian-backed Shi’ite militia, though Iraqi Prime Minister Haider al-Abadi later dismissed the likelihood of Iranian involvement.

“The three Americans were released in an area near Yousifiya, south of Baghdad. Intelligence forces received them and will hand them over to the American authorities (in Baghdad)”, an official in the interior minister’s office told Reuters.

The U.S. Embassy in Baghdad declined to comment immediately on the reports but a U.S. government source confirmed the release.

The three men are employed by a small company that is doing work for General Dynamics Corp, under a larger contract with the U.S. Army, according to a source familiar with the matter.

The Iraqi government has struggled to rein in the Shi’ite militias, many of which fought the U.S. military following the 2003 invasion and have previously been accused of killing and abducting American nationals.

Some analysts believe the kidnappings were meant to embarrass and weaken Abadi, who is trying to balance Iraq’s relations with rival powers Iran and the United States.

The names of two of the men are Wael al-Mahdawy and Amro Mohammed, according to a source familiar with the matter. The name of the third man has not been made available.

(Reporting by Stephen Kalin and Ahmed Rasheed; Editing by Kevin Liffey)

Nearly 5,700 buildings in Iraq’s Ramadi need repair, U.N. says

BAGHDAD (Reuters) – Around 5,700 structures in the western Iraqi city of Ramadi and its outskirts have incurred some level of damage since mid-2014, and almost 2,000 buildings have been destroyed, the United Nations said on Monday, citing satellite images.

Iraq declared victory over Islamic State in December after seizing the main government building in the city, the provincial capital of Anbar. But more than six months of fighting shattered most infrastructure and leveled many homes in the city, where around half a million people once lived.

The impact of Islamic State bomb attacks and U.S.-led coalition air strikes has been documented by the United Nations Institute for Training and Research, which compared satellite imagery collected last month with images from July 2014.

More than 3,200 structures in the city center have been affected, with 1,165 destroyed, the analysis showed. Those figures nearly double when outlying areas are included.

It is not clear what percentage of Ramadi has been affected, but the imagery shows none of the central districts has been spared and almost every block has incurred at least some damage.

A U.N. statement called the analysis preliminary and said it had not been validated in the field. Baghdad has not yet declared the city safe for return; Iraqi special forces clashed with militants in some districts as recently as last week.

The cash-strapped government in Baghdad is appealing to international donors to help rebuilding Ramadi, the largest city retaken from Islamic State. But it must first clear explosives planted by the militants in streets and buildings – an effort which also requires funding Iraq doesn’t have.

The United Nations is working with local authorities on plans to rebuild health, water and energy infrastructure. Meanwhile, displaced residents are waiting in camps or rented accommodations in other parts of the country.

It is expected to take months to secure the city before reconstruction can begin.

(Reporting By Stephen Kalin, editing by Larry King)

Samples confirm Islamic State used mustard gas in Iraq, diplomat says

AMSTERDAM (Reuters) – Islamic State militants attacked Kurdish forces in Iraq with mustard gas last year, the first known use of chemical weapons in Iraq since the fall of Saddam Hussein, a diplomat said, based on tests by the global chemical weapons watchdog.

A source at the Organization for the Prohibition of Chemical Weapons (OPCW) confirmed that laboratory tests had come back positive for the sulfur mustard, after around 35 Kurdish troops were sickened on the battlefield last August.

The OPCW will not identify who used the chemical agent. But the diplomat, speaking on condition of anonymity because the findings have not yet been released, said the result confirmed that chemical weapons had been used by Islamic State fighters.

The samples were taken after the soldiers became ill during fighting against Islamic State militants southwest of Erbil, capital of Iraq’s autonomous Kurdish region.

The OPCW already concluded in October that mustard gas was used last year in neighboring Syria. Islamic State has declared a “caliphate” in territory it controls in both Iraq and Syria and does not recognize the frontier.

Experts believe that the sulfur mustard either originated from an undeclared Syrian chemical stockpile, or that militants have gained the basic know how to develop and conduct a crude chemical attack with rockets or mortars.

Iraq’s chemical arsenal was mainly destroyed in the Saddam era, although U.S. troops encountered some old Saddam-era chemical munitions during the 2003-2011 U.S. occupation.

Syria gave up its own chemical weapons, including stockpiles of sulfur mustard, under international supervision after hundreds of civilians were killed with sarin nerve gas in a Damascus suburb in 2013, an attack Western countries blame on President Bashar al-Assad’s government, which denies it.

Sulfur mustard is a Class 1 chemical agent, which means it has very few uses outside chemical warfare. Used with lethal effectiveness in World War One, it causes severe delayed burns to the eyes, skin and respiratory tract.

(Reporting by Anthony Deutsch; Editing by Peter Graff)

Thousands of Iraqi refugees leave Finland voluntarily

HELSINKI (Reuters) – Thousands of Iraqi refugees who arrived in Finland last year have decided to cancel their asylum applications and to return home voluntarily, citing family issues and disappointment with life in the frosty Nordic country.

Europe is in the grip of its worst migrant crisis since World War Two, with more than a million people arriving last year, fleeing wars and poverty in the Middle East and beyond.

Germany and Finland’s neighbor Sweden have taken in many of the migrants but Finland too saw the number of asylum seekers increase nearly tenfold in 2015 to 32,500 from 3,600 in 2014.

Almost two thirds of the asylum seekers last year were young Iraqi men, but some are now having second thoughts, so Finland will begin chartering flights to Baghdad from next week to take them home.

Officials said about 4,100 asylum seekers had so far canceled their applications and that number was likely to reach 5,000 in the coming months.

“My baby boy is sick, I need to get back home,” said Alsaedi Hussein, buying a flight back to Baghdad at a small travel agency in Helsinki.

Somalia-born Muhiadin Hassan who runs the travel agency said he was now selling 15 to 20 flights to Baghdad every day.

“It’s been busy here for the past few months,” he said.

A majority of the home-bound migrants have told immigration services they want to return to their families, but some expressed disappointment with life in Finland.

“Some say the conditions in Finland and the lengthy asylum process did not meet their expectations, or what they had been told by the people they paid for their travel,” said Tobias van Treeck, program officer at the International Organization for Migration (IOM).

“TOO COLD”

Echoing that comment, travel agent Hassan said: “Some say they don’t like the food here, it’s too cold or they don’t feel welcome in Finland. There are many reasons.”

Nearly 80 percent of the migrants returning home are Iraqis. Just 22 of the 877 Syrians – whose country is racked by civil war – and 35 of the 5,214 Afghans who sought asylum in Finland last year have asked to return to their home country.

Along with other Nordic states, Finland has recently tightened its immigration policies, for example requiring working-age asylum seekers to do some unpaid work.

Hostility to migrants has also increased in Finland, a country with little experience of mass immigration and which now has economic problems.

Germany too, which took in 1.1 million people in 2015, has seen small numbers of Iraqi refugees choosing to go home.

Finland had been preparing to reject up to 20,000 asylum seekers from 2015, but the number of voluntary returnees could significantly reduce that figure.

“The number of returnees is increasing steadily … All asylum seekers are informed about the options for voluntary return and about the available financial assistance,” said Paivi Nerg, a senior official in the Finnish interior ministry.

However, most Iraqi returnees pay for their own flight home or seek help from Iraq’s embassy in Helsinki, she added.

Last year the Finnish government and the IOM provided financial help to 631 returnees and a similar number is expected this year.

The charter flights will carry up to 100 passengers back to Baghdad from Helsinki every week for as long as demand lasts, officials said.

(Editing by Jussi Rosendahl and Gareth Jones)

Iraq moving troops, preparing offensive to retake Mosul

BAGHDAD (Reuters) – Iraq’s military said on Friday it was mobilizing troops to prepare for an offensive the government has pledged to launch this year to retake the northern city of Mosul from Islamic State.

Hundreds of forces from the army’s 15th division reached Makhmour base, 45 miles south of Mosul, and more forces, including Sunni Muslim tribal fighters, were expected to arrive in coming days, said Brigadier-General Yahya Rasool, spokesman for the joint operations command.

Defense Minister Khaled al-Obaidi told Reuters last month that Iraq would launch the Mosul operation in the first half of the year and Prime Minister Haider al-Abadi has said 2016 would see the “final victory” against the militants.

Some U.S. officials have endorsed that assessment, but a top U.S. intelligence officer told Congress this week any operation to retake Mosul would be long and complex and unlikely to finish this year.

With more than a million people still living there, Mosul is the largest city controlled by Islamic State, which declared a ‘caliphate’ in swathes of territory it seized in Iraq and neighboring Syria in 2014.

Retaking it would be a huge boost for Iraqi forces who, backed by air strikes from a U.S.-led coalition, reclaimed the western city of Ramadi from Islamic State in late December.

Mosul, however, is a far larger city with a populace made up of many sects. And even in Ramadi, Iraqi forces are still working to secure that city and its environs.

Iraq’s Rasool told Reuters on Friday that troop movements south of Mosul were being coordinated with the peshmerga, the armed forces of the autonomous Kurdish region north and east of Nineveh which are expected to join the campaign.

“Once we complete all the preparations, we will officially announce the date for the start of Mosul operations,” he added.

The United States, which is leading an international campaign in both Iraq and Syria to defeat the jihadist group, has said its strategy is to regain territory at the heart of Islamic State’s cross-border state, take Mosul and the Syrian city of Raqqa, and destroy the confidence of its fighters that it can expand as a magnet for jihadis.

Iraq’s army, weakened by years of corruption and mismanagement following the U.S.-led invasion in 2003, is trying to rebuild itself after collapsing 18 months ago in the face of Islamic State’s lightning advance.

(Reporting By Stephen Kalin and Ahmed Rasheed; Editing by Andrew Heavens)

U.S. tells allies campaign to defeat Islamic State must be accelerated

BRUSSELS (Reuters) – The United States pressed allies on Thursday to contribute more to a U.S.-led military campaign against Islamic State that it says must be accelerated, regardless of the fate of diplomatic efforts to end Syria’s civil war.

U.S. Defense Secretary Ash Carter started talks on Thursday in Brussels with more than two dozen defense ministers, including from key ally Saudi Arabia, which renewed its offer potentially to send troops into Syria.

Carter’s push came a day after France delivered a rebuke to President Barack Obama, demanding that Washington show a clearer commitment to resolving the crisis in Syria where Russia is tipping the military balance in favor of President al-Bashar Assad.

The talks take place as U.S. Secretary of State John Kerry leads a diplomatic push in Munich to rescue imperiled peace efforts, which are being held despite Russian bombing raids to bolster Syrian forces around the city of Aleppo.

Carter sought to draw a line between military and diplomatic efforts. “Our focus here is going to be on counter-ISIL and that campaign will go on because ISIL must be defeated, will be defeated, whatever happens with the Syrian civil war,” Carter told reporters, using an acronym for Islamic State.

“But it certainly would help to de-fuel extremism if the Syrian civil war came to an end.”

The United States hopes the face-to-face gathering of coalition defense ministers will allow it to secure more support for a military campaign that aims to recapture the Islamic State strongholds of Raqqa in Syria and Mosul in Iraq.

WARPLANES, TRAINING, SURVEILLANCE

Carter plans to offer a long list of required military capabilities — which, beyond air power, include training Iraqi forces and help with intelligence and surveillance. Carter said countries that cannot contribute militarily can help in other ways, like by choking Islamic State financing.

“We’ll all look back after victory and remember who participated in the fight,” Carter said, addressing the coalition defense ministers, adding the campaign would move more swiftly “if all of the nations in this room do even more”.

He also predicted “tangible gains” on the ground in the coming weeks, vague terminology that could mean anything from territorial advances to strikes against militant leaders or infrastructure.

Saudi Arabia’s Brigadier General Ahmed Asseri, a military spokesman, said his country was ready to send troops into Syria if there was a consensus in the coalition. But he declined to elaborate, saying: “It is too early to talk about such options.”

“Today we are talking at the strategic level,” Asseri told reporters in Brussels.

Carter and U.S. defense officials also sought to manage expectations about the talks, since many ministers will not be able to make new commitments without first winning support from their parliaments. The timeline for the campaign to retake Raqqa and Mosul is also unclear.

The head of the U.S. Defense Intelligence Agency cautioned this week that Iraqi forces were unlikely to recapture Mosul this year, despite hopes by Baghdad.

Carter only said securing Raqqa and Mosul needed to happen “as soon as possible”. He also acknowledged the need to grapple with Islamic State’s spread beyond Syria and Iraq, particularly in Libya.

WASHINGTON FACES SCEPTICISM

Even if there is consensus on the military plan to fight Islamic State on Thursday, it is unlikely to diminish scepticism about broader U.S. policy in Syria, which has sought to limit America’s role in the civil war.

French Foreign Minister Laurent Fabius on Wednesday questioned the commitment of the United States to resolving the Syrian war. Rebel groups say that while Washington has put pressure on them to attend peace talks, they see less help on the battlefield.

NATO ally Turkey has meanwhile, upbraided the United States for supporting Syrian Kurdish PYD rebels, saying Washington’s inability to understand the group’s true nature had turned the region into a “sea of blood”.

Eager to sidestep such friction, NATO allies have focused on grappling with the humanitarian fallout from Syria’s conflict at talks over the past two days.

NATO announced on Thursday it will seek to help slow refugee flows through the Aegean Sea with a maritime mission to target criminal people smuggling networks.

(Reporting by Phil Stewart and Robin Emmott, additional reporting by Sabine Seibold, editing by Peter Millership)

U.S. looks to shore up allies’ support to battle Islamic State

BRUSSELS (Reuters) – The United States said on Tuesday it hoped allies demonstrate a willingness to ramp up their contributions to the fight against Islamic State and to deterring Russia in eastern Europe during high-level defense talks in Brussels this week.

Defense Secretary Ash Carter said he plans to outline America’s plan to accelerate the campaign against Islamic State to defense chiefs from more than two dozen allies at talks on Thursday.

The United States has long-standing concerns that many allies are not contributing nearly enough to combat the jihadist group that has spread beyond its self-declared caliphate in parts of Iraq and Syria.

“I don’t think anybody’s satisfied with the pace of the (campaign), that’s why we’re all looking to accelerate it. Certainly the president isn’t (satisfied),” Carter told reporters traveling with him.

Washington has signaled the need for military and police trainers as well as contributions of special operations forces, including from Sunni Muslim Arab allies now expressing a new willingness to contribute.

“We have a very clear operational picture of how to do it. Now we just need the resources and the forces to fall in behind it,” he said, noting plans to capture Islamic State strongholds of Mosul in Iraq and Raqqa in Syria.

A top U.S. intelligence official told Congress on Tuesday that an Iraqi-led operation to retake Mosul is unlikely to take place this year.

The U.S. strategy in Syria is likely to come under intense scrutiny after four months of Russian air strikes have tipped momentum toward President Bashar al-Assad in Syria’s five-year-old civil war.

Defense chiefs were expected to discuss a major Syrian government offensive backed by Russia and Iran now underway near Aleppo that rebels say threatens the future of their insurrection.

DETERRING RUSSIA

On Wednesday, NATO defense ministers will begin outlining plans for a complex web of small eastern outposts, forces on rotation, regular war games and warehoused equipment ready for a rapid response force.

U.S. plans for a four-fold increase in military spending in Europe to $3.4 billion in fiscal year 2017 are central to the strategy, which has been shaped in response to Russia’s annexation of Crimea from Ukraine in 2014.

“I’ll be looking for others in NATO to echo (us) in our investment,” Carter said.

Carter said the plan aimed to move NATO to a “full deterrence posture” to thwart any kind of aggression.

“It’s not going to look like it did back in Cold War days but it will constitute, in today’s terms, a strong deterrent,” Carter said.

(Reporting by Phil Stewart; Editing by Alistair Bell)

Iraq’s troubled finances slow efforts to rebuild Ramadi

BAGHDAD (Reuters) – Strain on Iraq’s budget from falling oil prices is delaying the removal of Islamic State explosives in Ramadi and the restoration of basic services needed for displaced civilians to return to the western city.

The army declared victory in December over Islamic State (IS) after elite counter-terrorism forces seized the Anbar provincial capital’s main government building. On Tuesday those forces reclaimed strategic territory linking the city to a major army base nearby.

The recapture of Ramadi was the first major gain for the U.S.-trained army since it collapsed in the face of an assault by the ultra-hardline Sunni militants in 2014. Its recovery boosted Prime Minister Haider al-Abadi in his quest to oust IS from Mosul, northern Iraq’s biggest city, later this year.

But Ramadi’s hundreds of thousands of residents will not be able to go home until bombs are removed and infrastructure damaged by six months of fighting is rehabilitated – operations that require tens of millions of dollars Baghdad cannot spare.

“We know that the government has its back against the wall fiscally. In order to stabilize areas and to help displaced families go back, we’ve got to do more,” said Lise Grande, the United Nations’ humanitarian coordinator in Iraq. She appealed to international donors for at least $40 million more for initial reconstruction efforts.

Iraq, with income nearly exclusively from oil, is struggling to pay its bills amid the fall in global crude prices. Anbar Governor Sohaib al-Rawi said his provincial government had not received its share of the federal budget in about two months.

“The local government has accumulated debts from last year which will be paid from this budget,” al-Rawi told reporters in Baghdad, declining to define the size of the debt.

Besides U.N.-funded activities, he said efforts to prepare Ramadi for the return of civilians were being financed “through local efforts” of provincial authorities, without providing details.

Unless additional funds are provided, it could take nine months for those efforts just to clear Tamim, a large district in southern Ramadi where the first phase of U.N. efforts will be conducted, according to Grande.

The United Nations also plans to rehabilitate health, water and energy infrastructure in the city, much of which was destroyed in fighting that included Islamic State bomb attacks and devastating U.S.-led coalition air strikes.

“The level of destruction in Ramadi is as bad as anything we have seen anywhere in Iraq,” said Grande. “Thousands of homes have to be rebuilt, thousands of buildings have to be rebuilt. The total cost of reconstruction in Ramadi is huge.”

STRATEGIC ADVANCE

Tuesday’s advance by Iraqi forces in Ramadi’s eastern farmlands boosted government efforts to close in on Falluja, the Islamic State stronghold located halfway to Baghdad and now besieged by the Iraqi army and allied, Iranian-backed Shi’ite Muslim militias.

The ultra-hardline Sunni militants of IS swept through a third of Iraq in 2014, declaring a caliphate in Iraq and Syria, carrying out mass killings and imposing a draconian form of Islam, but have since been pushed back on various fronts.

A military statement broadcast on state television said the army, police and counter-terrorism forces had retaken several areas, including the town of Husaiba al-Sharqiya, about 10 km (6 miles) east of Ramadi.

“(Our forces) also managed to open the road from Ramadi to Baghdad that passes through al-Khaldiya,” the statement added, referring to a highway that links the city to the Habbaniya army base where U.S.-led coalition forces are located.

“All of Ramadi has now been liberated,” said al-Rawi, the Anbar governor, adding that the handover of authority to local police from the military was going smoothly. No civilians are currently living in the city, he added.

It has taken more than a month for the military to clear insurgents from the eastern rural outskirts. Militants are still holed up in some northern farmlands bordering the main east-west highway, according to security sources.

(Reporting by Ahmed Rasheed and Stephen Kalin; Editing by Mark Heinrich and Dan Grebler)

To silence propaganda, Iraq seeks to take Islamic State offline

DUBAI (Reuters) – Iraq is trying to persuade satellite firms to halt Internet services in areas under Islamic State’s rule, seeking to deal a major blow to the group’s potent propaganda machine which relies heavily on social media to inspire its followers to wage jihad.

Social media apps like Twitter and Telegram are scrambling to limit Islamic State’s cyber-activities. So far that has proven to be a cat-and-mouse-game, with the group re-emerging through other accounts with videos showing beheadings and extolling the virtues of living in a caliphate.

For Iraq then, the key is to stop the militant group from accessing the web at all – a feat, which if achieved, could sever a significant part of a propaganda campaign that has inspired deadly attacks in the West.

Mobile networks are largely inoperable in the Islamic State-held swathes of Iraq, areas which also have little fixed-line broadband infrastructure. Militants instead use satellite dishes to connect to the web, or illicit microwave dishes that hook them into broadband networks in government-held areas, three telecoms industry sources told Reuters.

There are many challenges for the Iraqi authorities: within the satellite Internet industry, no one assumes responsibility for identifying and vetting end users, the territory under Islamic State’s often shifts, and a complex web of middlemen makes it tough to pinpoint who is selling militants Internet capacity.

The group has control over or operates in parts of western Iraq and northern and central Syria which have a population of up to 5 million people, according to the International Institute for Strategic Studies, most of them in Iraq.

To connect to the web via a satellite, all that is required is a V-sat terminal – a small dish receiver and a modem – and an Internet subscription.

Islamic State uses “the V-sat system to access the Internet in areas it controls,” an Iraqi communications ministry official told Reuters. “What’s still difficult for us is controlling V-sat receivers which connect directly to satellites providing Internet services that cover Iraq.”

In the IS-held northern city of Mosul, V-sat units can be bought for about $2,000-$3,000 at a sprawling electronics market near the university.

The official said Iraq was in talks with satellite companies covering Iraq to halt Internet services to IS-controlled areas, adding that he had received “positive signals” from them, but “the process is complicated and needs more time and procedures.”

Abu Dhabi state-owned Yahsat, both a satellite owner and provider of end-user connectivity through its consumer broadband brand YahClick, is the only company so far to cooperate with the ministry’s request, the official said.

Highlighting the complicated task, Reuters traced an IP address of an Islamic State fighter in Raqqa, the group’s de facto capital in Syria, which showed he was accessing the Internet using YahClick.

Yahsat would not directly comment on whether Islamic State had used its services, but said it complied with all laws and regulations. It has no official presence in Syria.

The company, among the biggest providers of satellite Internet in Iraq, relies on local agents to sell YahClick; three are listed on its website for Iraq, but other companies also sell the brand there.

“Anybody can become a reseller. It’s very informal and wholesalers probably want to keep it that way,” said the second industry source, who like the others declined to be named because they are not authorized to speak publicly.

WHO IS RESPONSIBLE?

Satellites owners such as Britain’s Avanti, France’s Eutelsat and Yahsat cover most of the Middle East.

These sell capacity to other companies, such as Abu Dhabi’s Wafa Technical Systems and Britain’s Bentley Walker, which then use this capacity to sell services and equipment to businesses and consumers. Like Yahsat, these firms rely on in-country partners to distribute and sell their products.

“In common with all satellite operators, Avanti does not maintain identity or accurate location detail on end user customers,” a company spokesman said, adding the firm complied with all laws and regulations where it operates.

V-sat units, which are potentially portable, transmit their location and so should be traceable. But no one in the industry seems willing to take on the responsibility to vet users.

Wafa and rival Bentley Walker, who buy satellite capacity and sell V-sat units, say they are unaware of who is ultimately using their services.

Wafa, which has about 2,500 V-sat units in Iraq, said in online adverts it could deliver to any Iraqi city including Mosul. “The re-sellers are the people who know the clients and where the end users are located,” said Kamal Arjundas, assistant director at the company.

Customers of Bentley Walker can still use its services even if the V-sat unit is in an area beyond state control, said sales manager Neil Denyer. As of July last year, the firm said its service covered over 1,500 sites in northern Iraq.

The company says it is Europe’s largest re-seller of satellite Internet equipment. It sells its own FreedomSat brand and those of other companies such as YahClick.

Denyer declined to identify the company’s Iraqi partners, citing political and commercial concerns, and later did not respond when asked whether Islamic State could be using his company’s products and services.

Wafa’s Arjundas also declined to identify its Iraqi partners and did not respond when asked about the militant group.

‘TWO HOPS TO MOSUL’

Even if Iraq cuts off Islamic State from satellite Internet, the group can remain online through illegal networks set up by businessmen in towns such as Kirkuk, Arbil and Duhok.

These entrepreneurs buy data capacity from fixed broadband providers, passing through many middlemen first. They connect this to microwave dishes, which have a range of about 40 kilometers to eventually reach end users in IS-controlled areas, said the three industry sources.

“It’s two hops via microwave dishes to Mosul,” said the third industry source.

“Their activities have very little chance of being detected. If you can buy a certain amount of capacity for $100 in Arbil and sell it on for $500, it’s good business.”

Baghdad and the Kurdistan Regional Government (KRG) that rules over an autonomous area of northern Iraq have banned the sale of Internet capacity that could end up in Islamic State hands, but it is hard to enforce.

There are many microwave dishes pointing in all directions in Iraq. The vast networks that mostly provide Internet connectivity to civilian homes and businesses make it difficult to establish who is using them.

“If you close one (of the businesses) down, they reappear under another disguise in a matter of days. They’re very difficult to identify,” said the first industry source.

“It would take enormous resources, knowledge and competency which Baghdad or the KRG don’t have,” said the third source.

A moral quandary is whether IS-held areas should be denied Internet access thereby cutting off civilians living there, said Rafaello Pantucci, of Britain’s Royal United Services Institute think-tank. Some have used the Internet to relate the abuses they have suffered.

“Would cutting off such communications have a major impact in disrupting and degrading Islamic State’s operations, or would it mostly just make the lives of people living under Islamic State even more difficult?”

(Additional reporting by Ahmed Rasheed and Stephen Kalin in Baghdad and Eric Auchard; Editing by William Maclean, Yara Bayoumy and Pravin Char)

Coalition aims to recapture ISIS ‘caliphate’ in Iraq, Syria

BAGHDAD (Reuters) – The U.S.-led coalition fighting Islamic State aims this year to recapture Iraq’s second city Mosul, working with Iraqi government forces, and drive the jihadis out of Raqqa, their stronghold in northeast Syria, Arab and Western officials say.

If it succeeds, the coalition will have struck a crippling blow against Islamic State’s self-proclaimed caliphate in Iraq and Syria.

The strategy is to regain territory at the heart of IS’s cross-border state, take both its “capitals”, and destroy the confidence of its fighters that it can expand as a Sunni caliphate and magnet for jihadis, according to these Arab and Western officials, few of whom were willing to speak on the record on a matter of such strategic sensitivity.

“The plan is to hit them in Raqqa in Syria and in Iraq at Mosul, to crush their capitals,” said an Iraqi official with knowledge of the strategy. “I think there is some speed and urgency by the coalition, by the U.S. administration and by us to end this year with the regaining of control over all territory.”

“Iraqi officials say 2016 will witness the elimination of Daesh (IS) and the Americans have the same idea – get the job finished, then they can withdraw and (President Barack) Obama will have a legacy,” said a diplomat in Baghdad, emphasizing the Iraqi part of the operation. “The day Mosul is liberated, Daesh will be defeated.”

The war against jihadi insurgents in this turbulent region has had its twists and turns but there is a palpable sense in Baghdad that the tide has turned against IS.

TWIN-PRONGED ANTI-IS STRATEGY

In the year after the jihadis’ summer 2014 surge back into Iraq from the bases they managed to build amid the chaos of Syria’s civil war, IS momentum as a rapid, flexible and brutal military force seemed unstoppable.

But in the past nine months IS has lost swathes of territory and strategic towns. In Iraq it was driven out of Tikrit and Sinjar in the north, the oil refinery town of Baiji in central Iraq, and Ramadi west of Baghdad in Anbar province, the heart of insurgency after the 2003 U.S.-led invasion that toppled Saddam.

In northern Syria, U.S.-allied Kurdish militia of the People’s Protection Units (YPG) have taken vital territory and border crossings below the frontier with Turkey, after breaking a long IS siege at Kobani and later taking Tel Abyad, north of Raqqa and a key supply line for the jihadi capital.

“Daesh are losing their ability to hold onto territory in Iraq and to stage the kind of complex attacks that allow them to hold the towns they seized,” said a U.S. official, adding that the recapture of Mosul would start in 2016.

Lieutenant-General Sean MacFarland, Baghdad-based head of the U.S.-led coalition, emphasized to a group of reporters last month the twin-pronged approach to operations against IS in Iraq, “in conjunction with something we might have going on over in Syria about the same time (and) see if we can put pressure on the enemy in two places at once and create a dilemma.”

Hisham al-Hashemi, an Iraqi expert on IS who advises the Iraqi government on the group, points out that as a result of last year’s setbacks “out of seven strategic roads between Iraq and Syria they (IS) now have one; they cannot move with ease and Turkey has tightened the noose on them.”

IS is under pressure across many other fronts apart from its ability to deploy. The collapse in oil prices has dented its revenue from oil smuggled, now through a less permeable Turkish border, from captured Syrian and Iraqi fields.

COVERT OPERATIONS

Coalition air strikes recently incinerated a stockpile of cash from looting and kidnapping, taxation and extortion, forcing IS to cut wages. It is losing top cadres. More than 100 mid-level to senior leaders have been killed since May, according to coalition spokesman Colonel Steve Warren, who says that “works out to an average of one every two days”.

“The place where they were holding huge cash reserves was targeted and destroyed,” the diplomat told Reuters.

“Daesh will be defeated in Iraq. It is not a question of if but when,” added another senior Western diplomat in Iraq.

A top Iraqi official, speaking on condition of anonymity, said the Mosul operation would require delicate collaboration between the U.S. air force, the Iraqi army, local Sunni tribal forces, and Peshmerga fighters from the self-governing Kurdistan Regional Government east of the city.

“Most likely, coalition special forces will be embedded with the Iraqi forces and the Peshmerga will close on Mosul from the north and east.”

In Syria, he said, the likely combination would involve coalition air strikes with special forces and U.S.-led covert missions operating alongside mainly Kurdish fighters of the YPG and other Syrian rebels. “They have some special forces on the ground in Syria in Hasaka, on the outskirts of Raqqa with the rebels,” the Iraqi official said.

An airstrip at Hasaka is being prepared by the United States for this purpose.

The official warned, however, of the need for coordination with Russia, which brought its air force to Syria last September to shore up the Iran-backed rule of President Bashar al-Assad, and is using an airstrip in Qamishli further north, but focusing most of its fire on mainstream and other Islamist rebels rather than IS.

This “competition between the two superpowers is really very, very dangerous”, he said. “There must be coordination (around) the complex operations that will take place.”

LIBYA, NEW IS DESTINATION

Yet even in the unlikely event that all these plans go like clockwork, that alone would not put an end to IS.

The group, IS experts say, has become expert at defensive warfare, and is spreading its tentacles from Europe to North Africa.

Inside the recaptured city of Ramadi the Iraqi army found a warren of underground tunnels the jihadi forces used for shelter, mobility and escape. Mosul, a far bigger city with one million people and a river on one side, is heavily defended and tunneled, with berms, trenches and hidden bombs.

Abu Bakr al-Baghdadi, the IS “caliph” still based near Mosul, has already begun to anticipate tactical reverses.

Arab and Western security sources say he has recently sent several hundred of his top lieutenants to Libya, to consolidate the existing IS bridgehead there amid the chaos of a splintering country, and to offset diminishing revenue in Syria and Iraq by creaming off Libyan oil resources.

Coalition dependence on Kurdish forces in both northern Syria and Iraq, and the Iraqi army’s reliance on Iran-backed Shi’ite militia up until the reconquest of Ramadi by regular forces, were and are being exploited by IS as a means to rally Sunni Arab grievances.

Battlefield success will count for little, officials and diplomats say, without political reconciliation and power-sharing to heal the wounds opened in the ethno-sectarian bloodletting that followed the overthrow of Saddam’s minority Sunni Arab rule in 2003.

AFTER MOSUL?

Islamic State, whose forerunner first emerged as a Sunni reaction to the U.S. installation of Shi’ite majority rule in Iraq, twisted the sectarian knife in the country.

But after the fall of Mosul, then prime minister Nouri al-Maliki, leader of the Shi’ite Islamist Dawa party, who had alienated the Sunnis by tearing up a power-sharing pact with them and the Kurds, was pushed aside. He was replaced by a more conciliatory Dawa leader, Haider al-Abadi.

Most observers give Abadi credit for trying to be more inclusive by negotiating oil revenue sharing with the Kurdistan Regional Government, proposing a National Guard, under which the different sects and ethnic groups would police their areas, and setting out a vision of a decentralized, federal Iraq.

Yet distrust of the Dawa is now so engrained it extends to Abadi. “The problem among the Shi’ites, especially in Dawa, is that there is a deep anti-Sunni feeling,” said one Iraqi leader.

But fear of a return to the Sunni domination of the Saddam era is widespread too, and fanned by IS.

“The National Guard law is rejected by the Shi’ites because the Sunnis will then have their own army and this will threaten the Shi’ite population even if they are dominant now,” said the Baghdad-based diplomat. “The Shi’ites fear the return of Sunni power.”

Yet Abadi has shown signs of independence, from his party and its Iranian patrons.

Baghdad is abuzz with the story of how the prime minister recently ejected Major General Qassem Soleimani from a national security council meeting. The Iranian Revolutionary Guard commander had until recently been photographed often on the frontlines in Iraq and Syria.

The critical question, however, is whether Abadi can build up the army and regular security forces enough to establish control over Shi’ite militias under the sway of Tehran, accused by Sunnis of human rights abuses when they spearheaded the attacks on Baiji, Tikrit and Diyala last year.

Even if Mosul works, Abadi will still have to move quickly to provide things his corrupt predecessors were unwilling or unable to give to Iraqi citizens in general and disgruntled Sunnis and Kurds in particular.

(Addtional reporting by Maher Chmaytelli and Stephen Kalin; editing by Janet McBride)