An IS propaganda video released Monday with a purported appearance by the jihadist group's elusive supremo Abu Bakr al-Baghdadi showed him in what appeared to be a "very simple and isolated" location, Mahdi said on a visit to Berlin.

"One and a half years ago Daesh controlled large areas in Iraq and Syria, and now Baghdadi appears in an isolated, unknown location," he said about the world's most wanted man, using another name for IS.

"He did not seem to be among his followers like the first time in Mosul", he said, referring to a 2014 video in which Baghdadi announced the birth of IS's much-feared "caliphate" across swathes of Iraq and Syria.

After losing its last remaining territory in the Syrian town of Baghouz in March, "IS has not completely disappeared but suffered painful blows", the Iraqi premier said at a joint press conference with German Chancellor Angela Merkel.

Mahdi cautioned that IS "will try to rebuild trust among its fighters, will try to launch further operations" like the Sri Lanka April 21 attacks which killed more than 250 people.

"Daesh was broken, but if little cells are left, it could reactivate and resurface and commit painful attacks," he added, according to interpreted remarks.

Similarly, Merkel said the video was a sign that "we will remain occupied for some time to come with the question of how IS can finally be defeated."

The speaker in the 18-minute video, a man with a long grey beard that appeared dyed with henna, sat in a room with a Kalashnikov assault rifle leaning against the wall behind him.

He was identified as Baghdadi by both SITE, which tracks IS activity, and Hisham al-Hashemi, an Iraqi expert on the group.