Islamic State lose $800m in air strikes

Maj Gen Peter Gersten, who is based in Baghdad, said the US had repeatedly targeted stores of the group's funds.

The blow to the group's financing has contributed to a 90% jump in defections and a drop in new arrivals, he said.

In 2014, the US Treasury called IS "the best-funded terrorist organisation" it had encountered.

How is Islamic State funded?

Islamic State's struggle to stay rich

In a briefing to reporters, Maj Gen Gersten, the deputy commander for operations and intelligence for the US-led operation against IS, said under 20 air strikes targeting the group's stores of money had been conducted.

He did not specify how the US knew how much money had been destroyed.

In one case, he said, an estimated $150m was destroyed at a house in Mosul, Iraq.

Forces fighting IS received intelligence indicating in which room of the house money was stored. The room was then bombed from the air, Maj Gen Gersten said.

While it was difficult to know precisely how much money had been destroyed in total, estimates put the figure at between $500m and $800m, he said.

Islamic State's exact wealth is not known, but, after seizing oil fields and setting taxes, it approved a budget of $2bn and predicted a $250m surplus last year.

Since then, however, the group has lost territory, and its oilfields have been targeted in air strikes by the US-led coalition.

'Posing as women'

US intelligence indicated the group's cash troubles had led it to start selling vehicles to make money, Gen Gersten said. In January, the UK-based Syrian Observatory for Human Rights reported that IS announced it was to cut fighters' salaries in half "because of the exceptional circumstances that the Islamic State is passing through".

"We're seeing a fracture in their morale, we're seeing their inability to pay, we're seeing the inability to fight, we're watching them try to leave Daesh in every single way," Gen Gersten added, using an Arabic term for IS.

Some defectors had been captured posing as women or as refugees in Iraq, he said.

The number of those arriving to fight for Islamic State in Iraq and Syria had fallen to about 200 a month, Gen Gersten said, down from a peak of between 1,500 and 2,000 per month a year ago.

In February, the White House said it believed there were some 25,000 people fighting for IS, down from close to 31,500 last year.

Turkey has come under repeated pressure by the United States to tighten its border with Syria and prevent people crossing into IS-held territory.

On Tuesday, the US confirmed it would place rocket launchers in Turkey close to the border of territory held by the group.

Turkey's Foreign Minister Mevlut Cavusoglu told Haberturk newspaper the system would be deployed near the Syrian town of Manbij, through where IS brings in new supplies and fighters.