Islamist militant group ISIS (the Islamic State in Iraq and the Levant) said it is establishing a caliphate, or Islamic state, on the territories it controls in Iraq and Syria. It also proclaimed the group's leader, Abu Bakr al-Baghdadi, as caliph and "leader for Muslims everywhere", BBC News reports.

Setting up a caliphate ruled by the strict Islamic law has long been a goal of many jihadists.

Meanwhile, Iraq's army continued an offensive to retake the northern city of Tikrit from the ISIS-led rebels. The city was seized by the insurgents on June 11 as they swept across large parts of northern-western Iraq.

ISIS made the announcement in an audio recording posted on the internet. It said the Islamic state would extend from Aleppo in northern Syria to Diyala province in eastern Iraq.

Abu Bakr al-Baghdadi, the group said, would become the leader of the state and would be known as "Caliph Ibrahim".

In the recording, the rebels also demanded that all Muslims "pledge allegiance" to the new ruler and "reject democracy and other garbage from the West". ISIS also said that from now on it would be known simply as "the Islamic State".

In a separate development, Israel called for the creation of an independent Kurdish state in response to the gain made by the Sunni rebels in Iraq. Prime Minister Benjamin Netanyahu called for the creation of an independent Kurdish state in response to gains made by Sunni insurgents in Iraq. In a speech in Tel Aviv, he said the Kurds "are a nation of fighters and have proved political commitment and are worthy of independence," according to the BBC.