Two years ago, "Islamic State" (IS or ISIS) militants took the world by surprise as they carved out a swathe of territory straddling the Syrian and Iraqi border, while nearly marching into Baghdad.

Today the jihadi group, which seeks to create an Islamic caliphate, is simultaneously diminished but also thriving.

US-led bombing attacks, in conjunction with various military support groups on the ground, have largely rendered the IS conventional military power impotent, according to multiple military experts, including Hassan Hassan, an expert at the Tahrir Institute for Middle East Policy in Washington.

"They're weakened tactically and operationally. They cannot do what they did in 2014." he said, referring to when they nearly rolled into Baghdad. "That bubble has burst but the organization is still there."

And they're not about to go away. Not only that but given their diminished capacity to launch conventional military strikes they have morphed back into just being a terrorist organization.

"In the last four months ISIS has launched hundreds of suicide operations,” Hassan said. “That tells you how much support they still have."

Robert Litwak, a scholar at the Woodrow Wilson Center in Washington, cites figures reportedly put out by the State Department claiming ISIS has lost 40 percent of its territory in Iraq.

Plan to liberate Mosul

And the expectation - or hope, at least - is that ISIS will soon lose more territory, "the Iraqi army is preparing for the expected offensive to liberate Mosul," he said, referring to the strategic city of more than 1 million people in the northwest of the country. "The dilemma is that the liberation of Mosul would entail very difficult urban fighting."

But reclaiming Mosul is seen as essential, not only for the inhabitants of the city but for the broader strategic imperative that comes with wresting one of the country's largest cities away from the militants.

Among other aspects, notable assets such as large cities and large swathes of territory serve as powerful recruitment tools that entice would-be jihadis.

"The biggest challenge for the United States is to build up effective local military forces in Iraq to take the lead in the fighting to recapture Mosul - a development that would deal a major psychological blow to ISIS," Litwak said.

Local fighting forces, be it the Iraqi military in the center of the country or Kurdish fighters in the north, hold the key to military success. That is why most the territorial loses suffered by the IS have been in Iraq, not Syria.

The civil war in Syria has been raging for five years. The Western allies have declared that Syrian President Bashar al-Assad has to go but he seems to be entrenched thanks to unwavering support from his allies in Russia and Iran.

Without the support of a local military force on the ground, Western air power is limited in its ability to roll back Islamic militants, be it IS or al Qaeda.

Russia's bombing in Syria

For more than four years Moscow was more of a low-key, behind-the-scenes supporter of Assad. But that all changed about nine months ago when the Kremlin unleashed its air force bombers over Syria.

Human rights advocates and international observers have accused the Russians of indiscriminate bombing of civilians - pushing the war's death toll beyond 270,000.

"Russia has come in to prop up the Assad regime," Hassan laments. "Part of the problem is that Russia is complicating the story - the strategic fight against ISIS, making it harder for a political solution."

Indeed, the West is now hoping for a political solution in Syria, while it presses for a military solution in Iraq.