At the same time, al-Qaeda's difficulties in communicating securely from rural Pakistan caused its affiliates to become more autonomous from "core al-Qaeda". By 2013-14, Pakistan had become a more dangerous environment for foreign jihadists, with Pakistan's military operations and US drone strikes killing several hundred foreign fighters, causing many to flee to the relative safety of Afghanistan.

To compound al-Qaeda's problems, global jihad's centre stage in Syria had been taken over by the younger and more assertive terrorist organisation ISIS, or ISIL, with its charismatic leader Iraqi cleric Abu Bakr al-Baghdadi (born 1971). ("Abu Bakr" was one of the companions of Muhammad and the first Caliph of Islam). Dr al-Zawahiri requested al-Baghdadi to make peace with the al-Nusra Front in Syria and stop its brutality against civilians and prisoners, but by February 2014, al-Zawahiri had given up on ISIL/ISIS and declared it was no longer affiliated with al-Qaeda, unlike the more compliant al-Nusra Front.

In June this year, al-Baghdadi declared himself Caliph of the Muslim world and leader of "Islamic State" (his new name for ISIL/ISIS), in direct competition with al-Zawahiri and al-Qaeda. (Some Western nations still use IS's former acronyms, ISIL or ISIS, because "Islamic State" is seen as giving the organisation undesirable status.) Many terrorist groups have since pledged allegiance to al-Baghdadi and IS, including the Abu Sayyaf Group in the Philippines.

Recruitment has not been a problem for IS. Over the past two years it has proved more appealing to Muslim youth internationally than either al-Qaeda or its affiliates. This is because it provides an opportunity to fight Islam's enemies in a way that has not been available to young Muslims since the war against the Soviets in Afghanistan from 1979 to1989, or the conflict to protect Muslims in the Balkans from 1992 to1995.

This June, The Economist reported that ISIS may have up to 6000 fighters in Iraq and 3000 to 5000 in Syria, including perhaps 3000 foreigners (with nearly a thousand from Chechnya and perhaps 500 or so more from France, Britain and elsewhere in Europe). In August, the Syrian Observatory for Human Rights claimed that the group had increased its strength to 50,000 fighters in Syria and 30,000 in Iraq. About 60 are from Australia (fighting for both IS and the al-Nusra Front). The military commander of IS is an experienced Chechen fighter from Georgia, Abu Omar al-Shishani (born 1986).

IS's rise has been fairly rapid, although it has historical roots in groups like al-Qaeda in the Land of the Two Rivers, sometimes referred to as al-Qaeda in Iraq, which dates back to 2003. Since 2011, IS has managed to raise its profile in Syria through its successes against the Assad government in direct competition with other extreme groups like the al-Nusra Front. It has also attacked its competitors, absorbed some and diverted incoming foreign fighters to its ranks. At the same time it has managed to make enemies of Hamas, Hezbollah, al-Qaeda, the Kurds in northern Iraq, the Haider al-Abadi government in Iraq, and Iran. Regrettably, none of them, other than the ineffectual government of Iraq and the Kurds in northern Iraq, has military forces that the West would want to support against IS.

There are suspicions that IS is being funded from Saudi Arabia and Qatar, but it has also generated income from kidnapping and looting banks in captured areas.

Tracing its external funding sources is one way the organisation might be reined in.

With its substantial funding and captured equipment, IS has developed a formidable military capability against the type of forces it usually comes up against, with its fast-moving mobile columns that include wheeled armoured vehicles and technicals (utility vehicles with heavy weapons mounted).

However, its latest offensive in Iraq has been blunted by US air strikes that are able to target its vehicles. This will force IS to resort to a slower ground campaign through Iraq's towns and villages where air strikes cannot be used for fear of causing collateral damage. The US is conducting aerial surveillance of Syria, presumably with a view to mounting air strikes there as well to stop IS from surging across the border into Iraq.

The challenge for Australia, and other nations with Sunni Muslim populations, is how to undermine the attraction of the Syrian and Iraq conflicts for young Muslim men who, in Australia's case, are obviously not deterred by the 15 Australians killed so far in the fighting. This suggests the need for programs within Australia's Muslim communities to identify young men at risk and develop diversionary programs. We also need a strategy to deal with those who remain committed to IS. According to the ASIO director general, there are about 100 sympathisers in Australia actively supporting extremist groups.

Another issue is what to do about returning fighters. They can be convicted and jailed if there is sufficient evidence that they participated in the conflict in Syria or Iraq, but those who remain committed to IS after being released will require long-term monitoring.

Australia will no doubt join a US-led military coalition against IS following the global outrage over its brutal beheading of American journalist James Foley. This will inevitably make Australia a higher-profile terrorist target. Muslim youths who are frustrated in their bid to join the fighting may then direct their anger closer to home.

Clive Williams is a visiting professor at the ANU's Centre for Military and Security Law and an adjunct professor at Macquarie University's Centre for Policing, Intelligence and Counter Terrorism (PICT).