south. the lights happen when electrically charged parcel from the sun meets the earth's atmosphere. spectacular. news as always on al jazeejazeem slowly but surely, i.s.i.l. is losing ground in iraq and syria but don't kid yourself. it is far from defeated as a global force of violence. after blitzing across both countries in 2014 i.s.i.l. fighters have spent the last six months getting killed or driven out of some key places. like ramadi in iraq and aleppo in syria. what's more, i.s.i.l. last lost some key road connections, linkining the iraqi city of mosl with territory it controls in

syria. american special force he are helping the iraqi government and cusht kurdish informs rolling i.s.i.l. back. and syrian troops are fighting both i.s.i.l. and the u.s. backed rebels. either way, i.s.i.l. is on the defensive now in both syria and iraq butter the group is very much on the offensive everywhere else. the i.s.i.l. ideology is morphed into a franchise that's being taken up by the likes of boko haram in nigeria and grille la guerilla groups. the same story in libya. the new local i.s.i.l. franchise announced itself last year when

it murder twuf 21 egyptian christians in front of cameras. but as i.s.i.l.' i.s.i.l.'s fore started to turn, regrouping, in february, i.s.i.l. launched strikes against a border in tunisia, the base was hit, 49 people died in the raid and six were wounded. the defense secretary, u.s. secretary ashton carter says u.s. needs to confront i.s.i.l. everywhere. he said "we are going to protect ourselves in libya as in anywhere else." i'm joined by douglas olivant, a senior fellow at new america, a nonpartisan public policy think tank, a retired army officer who served as iraq director at the u.n. city council during the bush and obama administration.

us. >> thank you. >> take what i just said and tell me how you square this. is i.s.i.l. weaker stronger or roughly the same strength it once was when you take into account the fact they are growing in other places? >> they certainly are growing in other places and that's something we need to take account of. on the other hand, the growth in these places draws strength from the center. and i think as we see their caliphate in iraq and syria continue to shrink then the logic of becoming an affiliate of this shrinking shrinking entity does continue to disappear. >> what is the picture, what are we thinking of doing as the u.s. in iraq? >> well, this is a jsoc force and what they find is very high value targets.

they are not going out and killing i.s.i.l. riflen. those working in very, very important aspects of their campaign, finding them, removing them from the battlefield and then further pushing them for intelligence, finding out what they know so they can find the next target. >> according to a report in the new york times doug, the u.s. is going to question these fighters and hand them over to iraqi or kurdish authorities, so it's not just to pull out the leadership, it looks like they are trying to get information. what's -- what does that mean to you? why would they be doing that? >> well again they're trying to get information out of them to find the next target. so you find where one leader is staying. you know he's in this certain house on this certain block. you go pull him out and you find out what he knows, maybe he knows where other leadership people are or where key supply depots are or who is facilitating the foreign fighter

flow into iraq or syria and that then gives you your next set of targets that these jsoc soldiers, that means seel sol seal sol year soldiers find. gives you three or nine. >> the ransom income is down, the oil smuggling operation is down, the price of oil obviously is down so they were already selling it at a discount. there also it sounds like their recruitment numbers are down. are the two related? >> well, they're related. they have a very serious financing problem now. they were getting their money from essentially two place, they were selling oil and they were pillaging the land they held, they would call it taxing but simply stealing the goods that were in mosul, that were in raqqa, in

ramadi and tikrit. the places they still hold like mosul there's not very much left to steal so they're really running out of money in a sears serious way. which makes them run out of fighters which is a serious deal. >> trying to cult off all external sources of funding, we know people in qatar in kuwait, in saudi arabia, those countries at least on the surface have made it illegal to send money to help i.s.i.l. is that helping? >> sure. they're tightening down. look what we're having here is all these pieces of the strategy are finally coming into place. now it's been a very slow rollout and somehow scandalous i think to really get everything into place. why it took us so long to get special forces involved, why we let the oil trucks go for a year before we decided to kill them.

regardless, everything is coming into place and we see a tight ni effect all around i.s.i.l. >> let's talk about libya. i.s.i.l. has been encouraging its fighters to go to libya. the u.s. had targeted a training camp there. is there much of a significance, i mean libya if you are listing failed states in the u.s., libya is quite near the top of that list, you can throw afghanistan and you can throw iraq and syria in there. does it matter, it's a failed state so i.s.i.l. can regroup there. >> right f. i mean i.s.i.l. thrives in sunni-aish areas that are poorly governed, whether that is western iraq or eastern syria or all of northern libya now. that's where they're going to show up. the way to move forward in libya we can do air strikes or special forces raids in libya.

that's all fine and good. what we need to do is get a government running in lib yaf so wlibya sowe have a parch to wor. that is easier said than do in libya. >> that could be the same said in afghanistan, syria and iraq. >> absolutely. >> back to iraq for a second. we were talking about the u.s. special ops forces, the kurds have really shown themselves to be something to be reckoned with. the iraqi military on the other hand has a bad rap, being corrupt and not particularly effective. is that true or he they've just got are -- they've just gotten a bad reputation?

>> i think theach jus they've ja bad rep. the iraqi army has retain ramadi from the islamic state, they have yet to demonstrate that they can take a major city, that's a task that's still in front of them but i think right now you have to consider the iraqi army to be the most reliable fighting partner based on the fact they have shown they can take back a city and that's what we need to do. >> do the kurds have the right reputation? obviously when the iraqi army cut and ran that first time the narrative is what happened, we trained these guys we equipped them and they ran, the kurds took up the slack. is the reputation that the kurds enjoy as being a meaningful and effective fighting force valid? >> i think it is now. look when the kurds first faced i.s.i.l. they also had a bad day, remember? u.s. fire power had to come in and keep

the kurdish peshmerga up through erbil. they've done very, very well over the past months. >> let's talk a little about this ceasefire or let's what they call it the cessation of hostilities that does not involve the nusra front, the al qaeda franchise in syria and iraq and does not include i.s.i.l. what is your sense of it? the ceasefire is holding, these things don't tend to hold if there is no long term solution. >> no. it is holding. the best thing we can say about it is it is certainly exceeding expectations. frankly i don't think any of us thought we would get a ceasefire. the fact that it's there however precarious greatly exceeds expectations. that said, i don't think anyone is betting on it. >> it does sort of improve the chances of a long term solution with each day it holds but somebody needs to be working

towards long term solution. >> absolutely. i think obviously that's what john kerry and others are working very, very hard on. every day this holds that means that all the forces can fight on, fighting i.s.i.l, and nusra, al qaeda, rather than fighting each other. >> and they've got a meeting in geneva next week. hope they come up with something. doug, thank you for coming. how the life blood of i.s.i.l. could be the key to victory over them. >> the only live national news show at 11:00 eastern. >> we start with breaking news. >> let's take a closer look.

>> in a little more than two years i.s.i.l. has become a major player in the conflicts raging in the middle east. in that time the group has taken over al qaeda as the greatest threats in the mind of most americans. smuggling of oil in the territory it croams i controls in syria and iraq. howard shatz studied it back when it was still known as al qaeda in iraq. the richest terrorist organization.

howard good to see you, thank you for being with us. this is a very distinct difference between al qaeda and i.s.i.l. i.s.i.l.'s got a ready source of revenue that does not depend as much on a donor network, does not depend on countries that give you money through the back door. they've got a bit of a business going. >> absolutely. they've always been that way. donations have always been a very small part of their total revenue portfolio. right now their revenue portfolio includes oil as you said. and then also extortion and taxation much like a state would do. >> ransom has become a smaller part of there or is it still a major part of their revenue? >> so ransom has always been a nontrivial but small part of it, nothing compared to extortion or taxation, nothing like oil, or taking over banks throughout iraq and syria.

>> you estimated that i.s.i.l. produced more than 150 million barrels of oil a day, that's huge. what's the best way to cut into that revenue stream? >> the best estimates of current revenue stream is 30 to 40,000 barrels oday, after october, before the latest wave of air strikes called tidal wave 2. the one way is for them to stop producing then stopping them from being able to move the oil from the fields in trucks and destroying the trucks so they that. other than that, stop them from smuggling the oil to potential buyers and those buyers may be anywhere. all the evidence indicates a large portion of their cells are within their territory, very difficult to stop but sales also to syria and beyond their

territory to other countries. >> back in august 2014, when the air strikes began, back then oil was over $100 a barrel. oil is now $35 a barrel. what kind of an impact is that having on them? i suppose if you are buying oil from i.s.i.l. you would buy it at a substantial discount to what you would buy it on the world market. >> absolutely. there's much more risk involved, you are engaged an ill lici illicit act. in terms of refined products they sell out of their territory are also subject to world pricing. whatever they sell inside their territory is a little bit different, that is delinked they basically have a monopoly. but threefn the even there theye connections to the world price. that hurt them and hurt iraq a great deal. it wasn't just a one way bet against i.s.i.s.

>> you raise the interest of i.s.i.l.'s payroll that include the family of members who have been killed. you raise the point that if enough members are captured and killed these numbers start to mount up. how does that work into a targeted strategy of defeating i.s.i.l? >> sure. that's a side benefit to a targeted strategy. what we did find both when they were al qaeda in iraq and then they were islamic state of iraq and then when they were i.s.i.l, they basically have a promise. they have a payroll and they continued to pay families. payroll was based on family size. they continued to pay families if a person was detained or killed. what we saw was that their payroll costs were mounting throughout the 2000s when u.s. operations became very large. so either they stopped paying and that would hurt morale, they were breaking promises to members' families and it also hurt operations when they were running low on money. we

found a statistical relationship between the areas three were running and the levels of attacks in that area. as we degrade their ability to raise money we are also degrading their ability to conduct operations and hurting their morale because members are finding that their promises are not good. >> so at this point for all you have described, attacks on oil infrastructure, the transporting, limits on things money getting in and out and there have been changes in gulf states on laws that make it a crime the send money to i.s.i.l. fighters are they substantially degraded from where they were a year ago? >> they are degraded. i would not say they are substantially degraded. the recent air strikes did harm their oil revenues so before these air strikes it was estimated they were making as much as $40 million a month. let's say even if these air

strikes cut them to $20 million a month and we don't know the overall effect that is still a lot of money and it is still probably more than they are paying out in payroll. the oil have a good afternoon just one piece and -- the oil revenue we have degraded them, they have less money but ultimately the way to cut off their finances is to take back territory. >> howard, thanks for talking to you. howard shatz is a member of the rand business school. coming up whether the most drastic measures could yield the most dramatic results. >> our american story is written everyday. it's not always pretty, but it's real... and we show you like no-one else can. this is our american story.

this is america tonight.

al jazeera america. >> bombs are only one weapon america can use to fight the enemy. the pentagon has now stepped up its cyber offensive against i.s.i.l. al jazeera's jamie mcintire shows us the attack is on the web. >> the u.s. says the coalition continues to chip away at the supply lines. these videos released by the u.s. central command show some of the latest attacks against oil and gas facilities controlled by i.s.i.l. in syria. but at a pentagon news conference defense secretary ash carter

boasted, computer networks, cyber bombs. >> this is something that is new in this war. not something you would have seen back in the gulf war. but it's an important new capability, and it's an important use of our cyber-command and the reason cyber-expand was established in the first place. >> reporter: carter gave few details about the new cyber-offensive except to say cyber bombs overloaded its computer systems so they can't function, which in turn would cause a loss of confidence in its networks and limit i.s.i.l.'s ability to spread propaganda. >> we have to attack their command and control, one of the ways to do it. >> physically and virtually limit i.s.i.l, limit their abilities to conduct operations locally and tactic le. >> not much different than

friendly force he are doing ton ground, just as in northwest syria, where be al shazazi was captured. carter says it also gains valuable intelligence. >> as our partners take control of shadadi, i brief we'll learn a lot more about i.s.i.l.'s criminal networks, enterprise and what it does to sustain them. >> we're trying the gain control of i.s.i.l. and trying to stay a step ahead of them. >> iraqi troops prepare to take back mosul. the deployment of apache attack helicopters when he said the u.s. would provide capabilities that were offered before but turned down by the iraqis. >> jamie mcintire, national security correspond joining me from the pentagon. let's start with what you just said about the apache

helicopters. time and again we have heard the iraqi prime minister say, i've heard him my self say we don't need that. and most of us say, of course you do. >> there's a lot of frustration here at the pentagon and the u.s. military at the slow pace of iraqi operation. and i think what's going on here is the united states is looking at this training, the procedures, the plans that the iraqis are coming up with and they seem to be in slow motion. that is, they seem to want to sort of as they did in ramadi, encircle the city and sit there and wait for u.s. planes to kill as many i.s.i.l. fighters as possible and only go in around liberate the city at the very last moment. that's what's happening in fallujah, the u.s. is trying to goose them a little bit, come on guys, let's do things to help

you, we can bring in bridging equipment, we can provide air power from apache helicopters and the iraqi government seems to be on a slow motion schedule here, it's a sense of growing frustration. as they called it at the pentagon today, it's a different style of warfare, not the way the u.s. would do this, and what the u.s. would like to see is iraq sort of get off, get their assets in gear and get going. >> the irony is as much as you watch republican debates you'd seem that i.s.i.l. is an existential threat to america, it is not, it's very much an existential threat to iraq. >> the iraqis do have some new capabilities they didn't have before, f-16s they are able to deploy, they are more effective

they ask speak in arabic to some of the forces on the ground. but the u.s. is -- they do brief pretty much every other day here, giving an example of how much territory has been lost, how they're sloam tightenin sloy tightening the noose around i.s.i.l. it's a slow process. >> secretary of defense ash carter, said, how successful account u.s. government be in staying ahead of i.s.i.l. in terms of cyber warfare if their first priority is defending against i.s.i.l. attacks? >> really interesting program announced at the pentagon on that score. secretary of defense carter has a sort of bromance going, his third trip out there to microsoft. they announced the hack the pentagon program. they're going to invite hackers. >> a competition to try oget into some of the less secret systems of the pentagon and

they're going to pay a bounty if any of these hackers these so-called white hat hackers can get in. and it's one of the things they do in private industry. >> yep. >> but they've never done it in government and these hackers will have to sign up and then they'll have a chance to crack one of the public-facing websites that the pentagon thinks is pretty secure. ash carter says he hopes nobody gets through but if they do we'll learn something from them. >> absolutely, thanks for joining us, jamie mcintire at the pentagon. that's or show for today, i'm ali velshi, thank you for joining us. the news continues on al jazeera >> we're here to fully get into america. here to fully get into the nuances of everything that's going on, not just in this country, but around the world. getting the news from the people who are affected. >> people need to demand reform... >> ali velshi on target.

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