Prime Minister Mustafa al-Kadhemi said IS's Iraq "wali", or governor, Abu Yasser al-Issawi, was killed in an "intelligence-led operation" by Iraqi security forces.

"We promised and fulfilled. I gave my word to pursue Daesh (IS) terrorists, we gave them a thundering response," Kadhemi wrote on Twitter.

Iraq declared IS territorially defeated in late 2017 after a three-year fight aided by US-led coalition air strikes and military advisors.

Since then, IS attacks in urban areas have dramatically dropped, but Iraqi troops have continued to battle sleeper cells in the country's mountainous and desert areas.

Issawi, born Jabbar al-Issawi in Iraq's western region of Fallujah, had been identified last year by top jihadism experts as the country's most senior IS official.

He rose to that rank after fighting with the jihadist faction in both Iraq and neighbouring Syria, senior security sources told AFP.

Issawi was killed on Wednesday in a remote swathe of Iraq's northern Kirkuk province in an operation backed by the US-led coalition, the sources added.

"The coalition carried out five air raids, killing at least 10 jihadists," one of the sources said.

A coalition spokesman did not immediately respond to AFP's request for comment.

The coalition has continued to provide training, surveillance and air support but has drawn down its numbers as Iraqi forces take the lead on operations.

On January 21, two suicide bombers targeted a packed open-air market in Baghdad, killing at least 32 people and wounding more than 100 others.

The attack was later claimed by IS.

Iraqi and Western military sources described "gaps" in the security infrastructure that may have been exploited by the attackers.