DEIR AL-ZOR PROVINCE, Syria (Reuters) - U.S.-backed Syrian forces said they were close to defeating Islamic State in its final scrap of territory at Baghouz in eastern Syria after seizing an encampment from the jihadists on Tuesday, though the battle was not over yet.
Hardened militant fighters holed up in the encampment had been mounting a last-stand defense of the Baghouz enclave, all that is left of Islamic State's self-proclaimed "caliphate" that once spanned a third of both Syria and Iraq.
"This is not a victory announcement, but a significant progress in the fight against Daesh," said Mustafa Bali, a media official with the U.S.-backed Syrian Democratic Forces (SDF) on Twitter, using an Arabic acronym for Islamic State.
Bali said late on Tuesday clashes were ongoing and that fighters remain "in several pockets and their presence is not limited to a defined geography".
The SDF captured hundreds of wounded militants when it overran the camp on Tuesday, Bali said. It also captured 157 mostly foreign fighters.
Footage obtained by Reuters showed dozens of people milling around the captured camp, preparing their belongings to leave in a convoy of trucks. None of those visible appeared to be armed.
Men believed to be Islamic State fighters, women dressed in black robes and some children stood around the shabby camp area next to high rocks strewn with bits of tents and vehicles. A few of those visible used crutches or sticks to walk.
Footage from another part of the camp showed burnt-out cars, dozens of abandoned vehicles, shattered buildings and tents made out of blankets.
Asked by Reuters how long it would take to defeat the remaining jihadists, Bali said he expected the operation to end "very soon", adding that some remaining militants had fallen back to the bank of the nearby Euphrates River.
"The battles are not yet over," he said. "Some of the terrorists have taken their children as human shields. There are intermittent clashes."
GRAPHIC - How Islamic State lost Syria : https://tmsnrt.rs/2O7l4mN
Islamic State's fighters and followers have been steadily forced back to Baghouz after years of retreats in the face of military campaigns by an array of foreign and local forces.
The group's defeat at Baghouz will mark a milestone in the struggle against the jihadists, although adherents are still widely seen as a big security threat with a presence in remote territory and capable of mounting guerrilla attacks.
The capture of Baghouz will also mark a significant moment in the wider Syrian war, wiping out the foothold of one of the main combatants and leaving Syria partitioned between President Bashar al-Assad, Kurdish-led forces, and Turkey-backed rebels.
Diehard jihadists have been mounting a desperate defense of the camp at Baghouz, deploying suicide bombers and car bombs.
Over the past two months, more than 60,000 people have poured out of the dwindling enclave, nearly half of whom surrendered as Islamic State supporters, including some 5,000 fighters, according to the SDF.
Even facing defeat, Islamic State's propaganda machine still functions. An audio recording released overnight purported to carry a message from spokesman Abi al-Hassan al-Muhajer saying the group would stay strong and urged fresh attacks.
It has also put out a video from inside the Baghouz camp, showing bearded fighters among bullet-pocked cars and lying on earth ramparts as they fired assault rifles.
Against this scene, a man with a scarf wrapped around his head declaims a message of defiance: "The crusaders have forced us from our homes and burned us, may God exact the same from them ... O Muslim brothers everywhere, we have done our duty."
Prime Minister Adel Abdul Mahdi of neighboring Iraq said images showed Islamic State had built tunnels in Baghouz big enough for vehicles. "The advance is slow and the battle could take days to finish," he told a press conference in Baghdad.
RISK OF RESURGENCE
The U.S. military has warned that Islamic State may still count tens of thousands of fighters, dispersed throughout Iraq and Syria, with enough leaders and resources to present a menacing insurgency.
The Pentagon's own internal watchdog released a report last month saying Islamic State remained an active insurgent group and was regenerating functions and capabilities more quickly in Iraq than in Syria.
"Absent sustained (counterterrorism) pressure, ISIS could likely resurge in Syria within six to 12 months and regain limited territory," it said, using another acronym for the group.
U.S. officials said U.S.-backed forces had captured fighters tied to a January suicide bombing at a cafe in Syria that killed four Americans. The attack in the city of Manbij was the worst single incident involving U.S. personnel in Syria since they deployed on the ground there in 2015.
It occurred nearly a month after President Donald Trump confounded his own national security team and allies with a surprise decision to withdraw all 2,000 U.S. troops from Syria, declaring Islamic State had been defeated there.
Washington has now partially reversed Trump's decision, planning to leave 200 peacekeepers in SDF-held territory.
(Reporting by Rodi Said in Qamishli, Syria and another Reuters journalist in Deir al-Zor province, Phil Stewart in Washington and Ahmed Rasheed in Baghdad; Writing by Angus McDowall/Tom Perry/Lisa Barrington; Editing by Peter Graff and Gareth Jones)