IS group's Iraq territory slashed in half

Iraqi forces aided by the US-led coalition have reclaimed half the territory the Islamic State group once held in the country, a senior US official said Wednesday during a visit to Baghdad.

Deputy US Secretary of State Antony Blinken also announced $181 million in aid to address a humanitarian crisis that has festered in Iraq despite military successes. More than 3.3 million Iraqis remain displaced from their homes due to violence, according to the United Nations.

Despite suffering huge military defeats in recent months, IS still holds Iraq's second largest city of Mosul, which the country's government begin a campaign to retake the city this year.

Officials from the UN and US have warned that this could displace a further 1 million people.

Blinken said the way authorities handle the potential displacement in Mosul will be an important "test case" for lasting political reconciliation in the country. 

Iraq remains deeply divided, with many in the Sunni minority viewing the Shia-led government with suspicion and ethnic Kurds in the north pursuing greater autonomy.

A recent poll conducted by The New Arab showed that a majority of people from Mosul are opposed to the city to be taken back by controversial Shia militias, despite also being opposed to the IS group.

"The painstaking work of reconciliation and governance... will ensure that Daesh, once defeated, stays defeated," Blinken said, using an Arabic acronym for IS.

The extremist group swept across northern and western Iraq in the summer of 2014, and at that time many Sunnis welcomed IS as an alternative to what they saw as the increasingly sectarian rule of then-Prime Minister Nouri al-Maliki.

At the height of its power, IS ruled a self-declared caliphate stretching across a third of Iraq as well as large swathes of neighboring Syria.