ISIS has mobilised more than 1,000 militants in preparation for a massive military offensive to claim a new terror HQ, it has emerged, the Sun reported.
The death cult appeared to be on the brink of total defeat last month after losing more than 90% of its territory in Iraq.
ISIS is on the verge of being wiped out in Mosul – a former stronghold – as US-led airstrikes gradually push terrorists out.
The extremist group has also lost ground in Syria, where US-backed forces have almost reclaimed its de facto capital in Raqqa.
But Zaher Taher, MP for Diyala in central Iraq, claims the extremist group have amassed a huge army on the outskirts of Baqubah – not far from Baghdad.
In a press statement, he said jihadist troops are searching for new strongholds after losing ground across Iraq and Syria.
He said intelligence indicated more than 1,000 ISIS military had flooded into the province in recent days.
He said that clashes between ISIS soldiers and Iraqi forces in the Sunni regions of Diyala have intensified in recent weeks.
With Iraqi forces closing in on Mosul, ISIS could be looking to claim Baqubah – the capital of Iraq's Diyala Governorate – as its new terror capital.
ISIS fighters have been forced back into one quarter of the western part of the city.
But terrorists have been snatching children and civilians to use as human shields – bringing the liberation of Mosul to a standstill.