Montana Rep Greg Gianfor

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BAGHDAD: The Iraqi army retook the last town in the country still held by the Islamic State group on Friday as the jihadists' self-proclaimed "caliphate" faced collapse on both sides of the border with Syria.

The lightning recapture of the small Euphrates valley town of Rawa in an offensive launched at dawn came as the jihadists were also under attack for a second day in the last town they still hold in Syria, Albu Kamal just over the border.

The Islamic State group (IS) has lost 95 per cent of the cross-border "caliphate" it declared in Iraq and Syria in 2014, the US-led coalition fighting it said on Wednesday.

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