"This fight against ISIL will remain difficult. But we'll continue to draw on all elements of our national power, including the strength of our communities and our values as Americans. And I'm confident that we will prevail," Obama said, using another acronym for the Islamic State.
"We will destroy this barbaric terrorist organisation and continue to stand with those around the world who seek a better, safer future," he said in his weekly address.
Obama said the mission to destroy IS remains difficult, and the situation in Syria and Iraq is "incredibly complex."
In Syria, US commandos are working with anti-IS fighters including a largely Kurdish group called the Syrian Democratic Forces to defeat the group.
"ISIL is entrenched, including in urban areas. It uses innocent civilians as human shields. Despite these challenges, I can report that we're making progress. And this week, I directed my team to continue accelerating our campaign on all fronts," he said.
The US president said that the 66-member coalition, including Arab partners, continues to grow stronger, and more nations are making more contributions in the fight.
"In Iraq, ISIL has now lost more than 40 per cent of the areas it once controlled. In Syria, a coalition of local forces is tightening the squeeze on ISIL's stronghold of Raqqa. As we bomb its oil infrastructure, ISIL's been forced to slash the salaries of its fighters," Obama said.
"Thanks to the work of many nations, the flow of foreign terrorist fighters into Syria finally appears to be slowing. In short, in Syria and Iraq, ISIL's territory is shrinking, there are fewer ISIL fighters on the battlefield, and it's harder for them to recruit and replenish their ranks," he said.
Obama noted the only way to deal IS a lasting defeat is to end the civil war and chaos in Syria upon which it thrives.
A UN-backed ceasefire between the regime and the rebels entered into effect at midnight last night, under an agreement reached Monday between Russia and the US. It's the first major ceasefire in the civil war that has lasted almost five years.
"We're not under any illusions. There are plenty of reasons for skepticism. Even under the best of circumstances, the violence will not end right away. But everyone knows what needs to happen," he said.
"All parties must end attacks, including aerial bombardment. Humanitarian aid must be allowed to reach areas under siege. Much will depend on whether the Syrian regime, Russia and their allies live up to their commitments. The coming hours and days will be critical, and the world is watching," Obama said.
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