Exclusive: Insiders say group has been drained of Middle East recruits and that US wrongfooted by shift in balance of power between warring jihadi groups 
 
 Two of al-Qaida’s most important spiritual leaders have told the Guardian that the terror group is no longer a functioning organisation after being ripped apart by Isis. In a wide-ranging interview, Abu Qatada, a Jordanian preacher who was based in London before being deported in 2013, and Abu Muhammad al-Maqdisi, regarded as the most influential jihadi scholar alive, say the al-Qaida leader, Ayman al-Zawahiri, is cut off from his commanders and keeping the group afloat through little more than appeals to loyalty. 
 
 How Isis crippled al-Qaida | Shiv Malik, Ali Younes, Spencer Ackerman, Mustafa Khalili Read more 
 
 Senior insiders in Jordan add that al-Qaida around the Middle East has been drained of recruits and money after losing territory and prestige to its former subordinate division. The ongoing war between al-Qaida and Isis has left the US struggling to catch up with the tectonic shifts within the global jihadi movement, intelligence insiders told the Guardian. 
 
 Maqdisi, who Zawahiri counts as a close friend, is frank about the 63-year-old Egyptian’s situation. “He operates solely based on the allegiance. There is no organisational structure. There is only communication channels and loyalty,” Maqdisi said. 
 
 Qatada, who was born Omar Mahmoud Othman and has been described by the British government as a “truly dangerous individual”, also says Zawahiri is “isolated” and admits that Isis have been winning the propaganda and ground war against al-Qaida. 
 
 Qatada was deported from the UK to Jordan to face terror charges after a court battle lasting nearly 10 years with a series of British home secretaries. Last summer he was released from custody after being acquitted of all charges. Since his release, he has become an increasingly vocal critic of Isis. He told the Guardian its members were extremists and a “cancer” growing within the jihadi movement following their assault on al-Qaida over the last two years. “[Isis] don’t respect anyone,” he said. 
 
 Isis was al-Qaida’s branch in the heart of the Middle East until the group was excommunicated from the network in 2014 after disobeying commands from Zawahiri and starting an internecine war with fellow jihadists in Syria which left thousands dead on both sides. Today that fight continues and has expanded across Eurasia and the Mediterranean. Since declaring the establishment of its so-called Islamic State a year ago, Isis has gone on to build a global network of affiliates and branches that now stretches from Afghanistan to west Africa and competes with al-Qaida in its scale. 
 
 Isis leaders, who described al-Qaida as a “drowned entity” in issue six of their official English-language publication, Dabiq, have declared that they will not tolerate any other jihadi group in territory where they are operating. They have readily delivered on that statement. Last week, Isis fighters in Afghanistan were reported to have beheaded 10 members of the Taliban, and on Wednesday al-Qaida in Libya vowed retaliation after blaming Isis for the death of one of its leaders. 
 
 But the US has been slow to grasp the implications of al-Qaida’s decline and possible collapse despite extensive study of Isis, according to intelligence community insiders. “There’s such a cadre of people so closely tied to the al-Qaida brand within the IC [intelligence community] that I think they don’t see what else is going on outside the organisation,” said Derek Harvey, a former intelligence analyst who predicted how resilient the Iraq insurgency would be. 
 
 Over the past year, a group of junior and mid-level analysts have concluded that Isis advances have pushed al-Qaida to the margins of global jihad. A former senior intelligence official who did not want to speak on the record said they had been tracking the split between the two groups with great attention. Against them is what Harvey described as “the overwhelming majority of senior intelligence officials looking at this” who he said considered the enmity between Isis and al-Qaida as little more than “a squabble within”. 
 
 That prevailing view has found expression in repeated public statements by Barack Obama and his senior advisers conflating Isis and al-Qaida or denying that any split between the two organisations is meaningful. That raises questions about whether a US counter-terrorism bureaucracy long focused on al-Qaida as a prime threat can grapple with the group’s decline and a different one’s ascent. 
 
 In a typical comment, Barack Obama in March told Vice that Isis “is the direct outgrowth of al-Qaida in Iraq”. Although factually correct, this is substantively misleading: al-Qaida in Iraq was for 10 years al-Qaida’s most fractious and disloyal franchise, even before it began waging its violent campaign against the old guard. 
 
 The US secretary of state, John Kerry, has depicted the rivalry between the two jihadi groups as cosmetic, and his top Iraq policy official, Brett McGurk, has repeatedly stated: “Isis is al-Qaida.” Kerry’s new spokesman, John Kirby, said in his old job at the Pentagon that Isis, al-Qaida and al-Qaida’s Syrian proxy the Nusra Front “in our minds, from our military perspective, are very much one and the same”. 
 
 “We’ve got counter-terrorist guys who are focused on counter-terrorism and they grew up fighting the al-Qaida networks, but Isis is a different kind of network,” Harvey said. “It’s basing itself on skills and organisational capabilities and objectives that are much more accelerated and capable than what al-Qaida’s ever had.” 
 
 However misleading, the conflation of the two groups has political and legal benefits for Obama. He launched military action against Isis without congressional approval 10 months ago and a push for retroactive legislative blessing is all but dead in Washington. Portraying al-Qaida and Isis as the same thing has allowed the president to claim that the 2001 and 2002 congressional authorisations for attacks on al-Qaida and Saddam Hussein provide the legal foundations for the current campaign. 
 
 Meanwhile, the US continues to target al-Qaida. So far this year, according to the Bureau of Investigative Journalism, the Americans have launched 11 drone strikes in Yemen – the most recent came Tuesday night – and 11 more in Pakistan, killing between 82 and 122 people. 
 
 US officials have warned that al-Qaida’s presence in Yemen, which al-Qaida’s scholars consider to be its most loyal branch, has benefited from the January coup that displaced the US client government and the Saudi-led war to roll it back. ||||| Even as it launches waves of terrorist attacks around the globe, the Islamic State is quietly preparing its followers for the eventual collapse of the caliphate it proclaimed with great fanfare two years ago. 
 
 In public messages and in recent actions in Syria, the group’s leaders are acknowledging the terrorist organization’s declining fortunes on the battlefield while bracing for the possibility that its remaining strongholds could fall. 
 
 At the same time, the group is vowing to press on with its recent campaign of violence, even if the terrorists themselves are driven underground. U.S. counterterrorism experts believe the mass-­casualty attacks in Istanbul and Baghdad in the past month were largely a response to military reversals in Iraq and Syria. 
 
 [Turkey and the Islamic State appear to be headed toward outright war] 
 
 Such terrorist acts are likely to continue and even intensify, at least initially, analysts say, as the group evolves from a quasi-state with territorial holdings to a shadowy and diffuse network with branches and cells on at least three continents. 
 
 Iraqi forces are advancing toward Mosul, the largest city held by the militant group. (Reuters) 
 
 Indeed, while the loss of a physical sanctuary would constitute a major blow to the Islamic State — severely limiting, for example, its ability to raise money, train recruits or plan complex terrorist operations — the group’s highly decentralized nature ensures that it will remain dangerous for some time to come, according to current and former U.S. officials and terrorism experts. 
 
 “Where al-Qaeda was hierarchical and somewhat controlled, these guys are not. They have all the energy and unpredictability of a populist movement,” said Michael Hayden, the retired Air Force general who headed the CIA from 2006 to 2009. 
 
 [ISIS’s allure increases as its territory shrinks] 
 
 Islamic State officials, in public statements and in interviews, insist that the group’s “caliphate” project remains viable while also acknowledging that military setbacks have forced a change in strategy. 
 
 “While we see our core structure in Iraq and Syria under attack, we have been able to expand and have shifted some of our command, media and wealth structure to different countries,” a longtime Islamic State operative, speaking through an Internet-based audio service, said in an interview. 
 
 “We do have, every day, people reaching out and telling us they want to come to the caliphate,” said the operative, who agreed to speak to a Western journalist on the condition that his name and physical location not be revealed. “But we tell them to stay in their countries and rather wait to do something there.” 
 
 [ISIS releases a new video of captive British journalist John Cantlie in Iraq] 
 
 Libyan forces allied with the U.N.-backed government fire artillery toward ISIS fighters’ positions in Sirte, Libya, July 12, 2016. (Goran Tomasevic/Reuters) 
 
 But signs of desperation are mounting weekly inside the caliphate, which shrank by another 12 percent in the first six months of 2016, according to a report last week by IHS Inc., an analysis and consulting firm. 
 
 A series of communiques issued in the Islamic State’s Syrian enclave last month closed down Internet cafes in one province and ordered the destruction of TVs and satellite dishes in another. 
 
 The orders, billed as an effort to eliminate a tool for “disseminating infidel beliefs,” effectively cut off access to news from the outside world. 
 
 ‘Without any city or land’ 
 
 More signals of a coming downfall are contained in statements issued by Islamic State officials over the past six weeks, a period that saw the group’s fighters retreating across multiple fronts, from Fallujah in central Iraq to the Syrian-Turkish border. 
 
 A remarkable editorial last month in al-Naba, the Islamic State’s weekly Arabic newsletter, offered a gloomy assessment of the caliphate’s prospects, acknowledging the possibility that all its territorial holdings could ultimately be lost. Just two years ago, jihadist leaders heralded the start of a glorious new epoch in the world’s history with the establishment of their Islamic “caliphate,” which at the time encompassed most of eastern Syria and a vast swath of northern and western Iraq, a combined territory roughly the size of Great Britain. 
 
 [How ISIS tries to thwart attacks on its oil infrastructure] 
 
 The editorial, titled, “The Crusaders’ Illusions in the Age of the Caliphate,” sought to rally the group’s followers by insisting that the Islamic State would continue to survive, even if all its cities fell to the advancing “crusaders” — the separate Western- and Russian-backed forces arrayed against them. 
 
 “The crusaders and their apostate clients are under the illusion that . . . they will be able to eliminate all of the Islamic State’s provinces at once, such that it will be completely wiped out and no trace of it will be left,” the article states. In reality, the group’s foes “will not be able to eliminate it by destroying one of its cities or besieging another of them, or by killing a soldier, an emir or an imam,” it says. 
 
 The editorial asserts that the “whole world­ . . . has changed” with the creation of a theocratic enclave that has “shown all of mankind what the true Islamic state is like.” 
 
 “If they want to achieve true victory — they will not, God willing — they will have to wait a long time: until an entire generation of Muslims that was witness to the establishment of the Islamic State and the return of the caliphate . . . is wiped out.” 
 
 The same themes were repeated in an otherwise upbeat sermon by the Islamic State’s official spokesman, Abu Muhammad al-Adnani, marking the start of Ramadan observances. Adnani’s missive attracted international attention because of its call for a global terrorism campaign during the Muslim holy month. But Adnani also appeared to be preparing his followers for heavy losses. 
 
 [In a deadly Ramadan, ISIS terrorism exposes the failures of others] 
 
 At one point he evoked one of the darkest chapters in the Islamic State’s history, when the group — then known as the Islamic State of Iraq — was all but destroyed in 2008 by a combination of forces, including the U.S. troop surge and the “Anbar Awakening,” a revolt against the Islamists by Sunni Arab tribes. 
 
 “Were we defeated when we lost the cities in Iraq and were in the desert without any city or land? And would we be defeated and you be victorious if you were to take Mosul, Sirte or Raqqa, or even take all the cities?” asked Adnani, referring to the Islamic State’s primary strongholds in Iraq, Libya and Syria. “Certainly not!” 
 
 Echoes of an inglorious past 
 
 The group’s near-defeat in 2008 also has been cited multiple times in recent weeks in social-media accounts, suggesting to some analysts that its leaders are trying to limit the inevitable damage to the Islamic State’s reputation among jihadists as an unstoppable military and moral force. 
 
 [CIA director: ISIS not yet close to being restrained] 
 
 “They don’t want to lose territory,” said Cole Bunzel, a doctoral candidate at Princeton University’s Near Eastern studies department who provided a translation and commentary on the al-Naba editorial in the blog Jihadica. “But they’re trying to remind people that the group has a long history and they’re going to persist, just as they did in earlier times.” 
 
 The deadly attacks against Istanbul’s Ataturk Airport and Baghdad’s Karrada shopping district — both relatively easy targets for terrorists concerned only with massive numbers of civilian casualties — were probably also part of the same effort to reassure followers of the Islamic State’s vitality, said Will McCants, a Brookings Institution researcher and author of the 2015 book “ISIS Apocalypse: The History, Strategy and Doomsday Vision of the Islamic State.” 
 
 “The successful attacks abroad are an indication of deep worry at home,” McCants said. After years of boasting of the group’s invincibility, leaders such as Adnani are beginning to acknowledge battlefield losses while attempting to depict them in the most positive light, he said. Absent from the group’s statements is any acknowledgment of strategic and tactical errors that contributed to the Islamic State’s current predicament, fighting alone against a broad array of forces that includes the major Western powers, Sunni and Shiite Muslims, Russians and Kurds, McCants said. 
 
 “They’re not trying to be clever about it,” he said, “but they’re really trying to prepare their followers to cope with a ‘caliphate’ that is no longer a caliphate.” 
 
 The Islamic State operative who consented to an interview acknowledged that some of the group’s followers had become disillusioned because of mistakes by individual commanders. He said he didn’t care whether the organization’s headquarters remained in Raqqa or moved to North Africa or elsewhere — although he added that the loss of Raqqa would certainly be avenged. 
 
 “There is a message to all members of the coalition against us: We will not forget, and we will come into your countries and hit you,” he said, “one way or the other.” 
 
 European intelligence officials fear that the new phase is already underway. “They are . . . challenged as we adapt our strategy to their initial one, in order to start ‘de-sanctuarizing’ them,” said a senior French security official, speaking on the condition of anonymity to discuss counterterrorism strategy. “But they will now expand to other tactics and start executing much more insidious and covert ops, in big cities. 
 
 “The next step,” he said, “has begun.” 
 
 Mekhennet reported from Frankfurt, Germany. Liz Sly in Beirut contributed to this report. 
 
 Read more: 
 
 How ISIS inspires home-grown terrorist attacks 
 
 In tiny Albania, worries about ISIS’s emergence 
 
 Three suicide attacks in Saudi Arabia extend global wave of bombings and a bloody week 
 
 Iraqis trapped in Fallujah face twin peril of Islamic State and militia fighters ||||| Al Qaeda's leader Ayman al-Zawahri speaks from an unknown location, in this still image taken from video uploaded on a social media website June 8, 2011. 
 
 DUBAI Al Qaeda leader Ayman al Zawahri on Wednesday announced the formation of an Indian branch of his militant group he said would spread Islamic rule and "raise the flag of jihad" across the subcontinent. 
 
 In a 55-minute video posted online, Zawahri also renewed a longstanding vow of loyalty to Afghan Taliban leader Mullah Omar, in an apparent snub to the Islamic State armed group challenging al Qaeda for leadership of transnational Islamist militancy. 
 
 Zawahri described the formation of "Al Qaeda in the Indian Subcontinent" as a glad tidings for Muslims "in Burma, Bangladesh, Assam, Gujurat, Ahmedabad, and Kashmir" and said the new wing would rescue Muslims there from injustice and oppression. 
 
 Counter-terrorism experts say al Qaeda's ageing leaders are struggling to compete for recruits with Islamic State, which has galvanised young followers around the world by carving out tracts of territory across the Iraq-Syria border. 
 
 Islamic State leader Abu Abu Bakr al-Baghdadi calls himself a "caliph" or head of state and has demanded the loyalty of all Muslims. 
 
 The group fell out with Zawahri in 2013 over its expansion into Syria, where Baghdadi's followers have carried out beheadings, crucifixions, and mass executions. 
 
 As well being an indirect repudiation of Islamic State, the announcement could pose a challenge to India's new prime minister, Narendra Modi. He has already faced criticism for remaining silent about several incidents deemed anti-Muslim, underscoring fears that his Hindu nationalist followers will upset religious relations in the majority Hindi nation. 
 
 However, while al Qaeda is very much at home in the Afghanistan-Pakistan border area, due to influential contacts and a long presence there, it is a minnow compared to local militant groups in terms of manpower and regional knowledge. 
 
 SAFE HAVEN 
 
 Over the years Zawahri and his predecessor Osama bin Laden, killed by U.S. forces in 2011, repeatedly pledged allegiance to Mullah Omar, in return for the safe haven he granted their followers in Afghanistan. 
 
 The statement did not mention Islamic State or Baghdadi, but it appear to take a subtle dig at the group's efforts at administering areas it has seized in Iraq and Syria. 
 
 Islamic State's effort at state-building is something never attempted by al Qaeda's central leaders, who traditionally have preferred to plot complex attacks on targets in the West. 
 
 Zawahri called for unity among militants and criticised "discord" - echoing a common al Qaeda complaint against Islamic State's record of clashing with rival Islamist groups in Syria. 
 
 The statement also warned al Qaeda's new wing against oppressing local populations - another complaint levelled against Islamic State by critics in Iraq and Syria. 
 
 "If you said that you are doing jihad to defend the sanctities of the Muslims, then you must not transgress against them or their money or honour, and not even transgress your mujahideen brothers by word and action," he said. 
 
 "Discord is a curse and torment, and disgrace for the believers and glory for the disbelievers," he said. "If you say that by your jihad you do not want but the pleasure of Allah, then you must not race for governance and leadership at the first opportunity." 
 
 Muslims account for 15 percent of Indians but, numbering an estimated 175 million, theirs is the third-largest Muslim population in the world. 
 
 Centuries of rule by medieval Muslim invaders drove a wedge between Hindus and Muslims. Tensions have grown since Pakistan was carved from Muslim-majority areas of India in 1947, a violent partition in which hundreds of thousands were killed. In the era of Washington's "war on terror", some Indian Muslims have begun to sympathise more with hardline pan-Islamic groups and causes. 
 
 (Reporting by William Maclean; Editing by Alison Williams)
– Al-Qaeda's spiritual leaders say the organization is on the verge of "collapse" while ISIS thrives. The former al-Qaeda branch—booted last year for disobeying Osama bin Laden successor Ayman al-Zawahiri—is attracting money and recruits that have helped it spread from Afghanistan to west Africa, even as an al-Qaeda group in Pakistan sold its laptops and cars to pay for food and rent last year, a former member tells the Guardian. Zawahiri "operates solely based on the allegiance. There is no organizational structure," says jihadi scholar Abu Muhammad al-Maqdisi. Abu Qatada, a preacher deported from the UK to Jordan to face terror charges in 2013, agrees Zawahiri is "isolated" and lacks "direct military or operational control." He blames ISIS, which he calls a "cancerous growth" within the jihadi movement. The Guardian reports al-Qaeda's downfall began with Zawahiri's ascension after bin Laden's death. Zawahiri was forced to hide out near the Afghanistan-Pakistan border while fighters that would eventually form ISIS came together in Syria and Iraq. "What is leadership," asks an al-Qaeda associate, "if your leader is in Afghanistan and your soldiers are in Iraq?" Insiders say ISIS, which won't accept another jihadi group in its territory, is winning the propaganda war as well as the war on the ground. The New York Times reported last week that ISIS militants beheaded 10 members of the Taliban. A former intelligence analyst tells the Guardian the US considers ISIS and al-Qaeda to be the same entity and sees the rivalry as "a squabble within." But ISIS is "basing itself on skills and organizational capabilities and objectives that are much more accelerated and capable than what al-Qaeda's ever had."