Radical jihadists ISIS have declared a new Islamic caliphate on territory it own across Iraq and Syria, as the splinter groups eclipses the goal of its Al Qaeda predecessor.
Abu Bakr al -Baghdadi has been declared caliph of the new state and will be known as "Caliph Ibrahim".
The new state extends from Aleppo in northern Syria to Diyala province in eastern Iraq, and will be ruled on strict Sharia principles. Muslims must "pledge allegiance" to the new ruler and "reject democracy and other garbage from the West".
ISIS, which has also been called ISIL, has also announced it will henceforth be known as IS, simply 'Islamic State'.
The announcement came as Iraq's army began a hardened offensive to retake the city of Tikrit, occupied by the ISIS rebels.
Around 500 British-linked citizens are already thought to have travelled to the Middle East to fight with the Sunni Muslim group against its Alawite and Shia sectarian foes amid fears that more will join them.
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Professor Peter Neumann, from the International Centre for the Study of Radicalisation at King's College London, said the significance of today's announcement should not be underestimated.
He said: 'It's a declaration of war -- not only against the West and all the countries that are currently fighting Isis but, more importantly, against Al Qaeda. Isis now see themselves as the legitimate leaders of the movement and they expect everyone to fall in line.
"For ideological jihadists, the caliphate is the ultimate aim, and Isis - in their eyes - have come closer to realising that vision than anyone else.
"On that basis, Isis leaders believe they deserve everyone's allegiance.
"This could be the end of al Qaida. It depends on how al Qaida will respond. Unless they come out fighting, this could mark the end of (Osama) Bin Laden's vision and his legacy."
Prof Neumann said the declaration of a caliphate showed how confident Isis are after making spectacular gains in Iraq in recent weeks following a spectacular collapse by government forces.
"They haven't lost any of the momentum they gained when capturing Mosul," he said.
"On the contrary, they've held on to it, gained more territory and have seen jihadists from other groups swear allegiance to Isis.
"They must think their dream of creating the caliphate is finally coming true, and it's coming true faster and more dramatically than even they expected."
Islamic extremists have long aspired to recreate the Islamic caliphate that ruled over the Middle East for hundreds of years.
Over the last two weeks there has been growing concern over the number of young British Muslims who have joined Isis.
David Cameron claimed that they represent the "biggest threat to national security that exists today".
Several youths who are believed to have travelled to the Middle East to fight have been identified, rocking Muslim families and communities in towns such as Cardiff, Aberdeen and Coventry.
The Security Service has made tracking British jihadists fighting in the region its top priority after a video emerged showing Britons filmed in Syria urging UK Muslims to join insurgents there and in Iraq.
Foreign Secretary William Hague travelled to Iraq this week and appealed for the country's political leaders to set aside their differences and unite to combat the threat from Isis.