Intelligence officials are warning that the so-called Islamic State group (IS) is taking advantage of political instability in Iraq and is experiencing a resurgence there.
A BBC report details claims the threat posed by the group is growing in size and sophistication.
IS lost its last remaining territory in the country two years ago, but a senior Kurdish counter-terrorism official said it now resembles "al-Qaeda on steroids".
As IS is said to be regathering in the Middle East, Lahur Talabany, head of the Zanyari intelligence agency in Iraqi Kurdistan, told the BBC:
"They have better techniques, better tactics and a lot more money at their disposal.
"They are able to buy vehicles, weapons, food supplies and equipment."
Mr Talabany said he was unsure of the source of the group's newfound funding, whilst political unrest is also thought to have benefitted IS.
After the fall of the IS physical caliphate in Iraq, he said that the rebuilding phase has now come to an end.
The political differences between the Kurdistan regional government (KRG) and the central government in Baghdad have worsened since a 2017 referendum for Kurdish independence.
Mr Talibany says the divisions have led to a power vacuum in parts of the country, with neither the Iraqi army nor Kurdish fighters securing them.
He claims that "ISIS is patrolling" these areas now.
A new approach to terror was said to have been adopted by the group - choosing the Hamrin Mountains as a new hub in Iraq, rather than taking on an overt presence in easily targettable locations.
Kurdish intelligence suggests that IS is now around 10,000 strong in Iraq - Mr Talabany warning that the group could exploit the perceived alienation of the minority Sunni Muslims in Iraq.
After six months in the region, Brigadier General William Seely, Commander of Task Force-Iraq, said that the group is hiding "in conditions that no one can handle for too long", and IS only able to move in small teams.
However, Mr Talabany has warned that any resurgence of IS should be of international concern.
"The more comfortable they get here...the more they will think about operations outside of Iraq and Syria", he said.
Earlier this year, the UK praised international the effort involved in the fall of IS in Syria.
In October, former IS leader Abu Bakr al-Baghdadi was killed during a United States Special Forces raid in Syria.
Since then, defence officials in Iraq and Afghanistan have warned that the ideology of IS is "not dead", and that the group is growing in power and numbers outside of Syria.
Cover image: Islamic State fighters in 2014 (Picture: Islamic State).