The dramatic report claims ISIS is regaining strength in the deserts of western Iraq and eastern Syria, with between 20,000 and 30,000 fighters in the region.
According to the report these include: “A significant component of the many thousands of active foreign fighters.”
ISIS fighters are also “hiding out in sympathetic communities and urban areas” as the group focuses increasingly on guerrilla warfare.
The report claims that ISIS is particularly gaining strength in western Iraq, though it retains sizeable pockets in Syria.
The past 18 months have seen ISIS suffer a stunning series of defeats, with the group loosing much of its self-styled state.
In July 2017 Iraqi and Kurdish forces, backed by Western airpower, recaptured Iraq’s third city of Mosul after a fierce battle.
This was followed by the fall of Raqqa, which ISIS had made its capital, to a coalition of Kurds and Syrian rebels in October.
At its peak around 10 million people lived under ISIS control, which extended from north of Baghdad in Iraq to the suburbs of Aleppo in Syria.
The group acquired a reputation for brutality, executing 4,000 Iraqi security forces following its capture of Mosul in 2014 and conducting genocide against the Yazidi religious minority in Iraq.
ISIS also has sizeable affiliates in a number of other countries, including Libya, Egypt, Afghanistan and the Philippines.
Last year ISIS fighters in the Philippines stormed the city of Marawi and managed to hold it for five months.
Meanwhile Al-Qaeda also remains dangerous, with powerful franchises in Yemen, Somalia and parts of north Africa.
According to the report Al-Qaeda leader Ayman al-Zawahri is “projecting his authority more effectively than he could previously”.
There are also fears that ISIS fighters returning from Iraq and Syria could carry out attacks, especially in Europe.
The report warns: “The underlying drivers of terrorism are all present and perhaps more acute than ever before.”