The US-led offensive to recapture the Iraqi city of Mosul from the Islamic State group is making progress, the top American envoy to the coalition said Sunday.

IS had "returned to suicide bombing" because the area under its control was shrinking and it was on the defensive, Brett McGurk said at a conference in the Jordanian capital.

His remarks came as jihadist suicide assailants broke into a gas plant north of Baghdad and killed at least seven people, in an attack claimed by IS.

"We are now making progress against Daesh," McGurk said, using an Arabic acronym for IS.

"The campaign to isolate and squeeze and constrict Daesh in Mosul has already began," he said.

"We are doing precision air strikes in Mosul almost every day, we have a lot of information from the people who are inside Mosul about what Daesh is doing inside the city."

The Iraqi army said in late March that its troops and allied militia had launched what was expected to be a long and difficult offensive to retake Mosul, IS's main hub in the country.

McGurk said IS was now under "constant, synchronised pressure".

"Their territory is shrinking and they are now doing these suicide attacks against civilian populations. It is not going to work but this is what they are trying to do and it is nothing new," said the US envoy.

Iraqi forces collapsed in the face of the 2014 IS advance and the jihadist group ultimately overran around a third of the country.

IS has declared an Islamic "caliphate" in areas under its control in Iraq and in neighbouring Syria, where it has also seized significant territory.

Imposing its extremist interpretation of Islamic law, IS has committed widespread atrocities in areas under its control and launched a wave of attacks against the West.

The US-led coalition of Western and Arab nations launched air strikes against IS in Iraq in August of 2014 and has killed thousands of the jihadists.