In a government building in Mosul, a handful of Iraqi contractors gathered to compete for a tender last month.

It was the kind of routine session that happens in cities everywhere – except here the contract was for fortifications ordered by the new rulers in town, Islamic State. One member of the radical Islamist group grabbed a map and explained to those present what was required.

“Under Islamic State’s tender document, a trench two metres in depth and two metres in width needs to be dug around Mosul,” said a source in the city close to the tendering process. The winning contractor will be paid the equivalent of $4,000 for each kilometre of trench.

The tender demonstrates Islamic State’s determination to defend the city that it conquered in June, as the extremists grabbed a large area of territory from Baghdad. Rich in Muslim history, Mosul stands at the centre of the group’s aim to carve out a modern caliphate from large parts of Syria and Iraq.

They will fight to the last drop of blood defending Mosul

Interviews with 11 Mosul residents, several of whom fled this month, reveal how Islamic State has created a police state strong enough to weather severe popular discontent and military setbacks, including the deaths of senior leaders. Along with the planned trench, the militants have sealed Mosul’s western entrance with giant cement walls. They also blew up a bridge that Kurdish fighters could use to attack Mosul.

“They will fight to the last drop of blood defending Mosul, and for them this battle could define their existence. Losing Mosul means a final defeat for Islamic State in Iraq,” said a retired army general living in Mosul. In the city centre, in the old provincial council building, sits Islamic State’s religious court. Verdicts can be ruthless.

Last week, Islamic State in Mosul posted on the internet its version of justice: the stoning of a woman accused of adultery; two men crucified, accused of armed robbery; and two men thrown from a building for allegedly being homosexual.

Reuters interviewed Raheel, a 71-year-old Christian woman, who was brought before the court and forced to convert to Islam. Taken from a senior citizens home in Mosul, Raheel appeared before a judge. Armed guards stood in the room.

“The judge said that Islam is the true religion and that we must embrace it or we would die as infidels,” she said after her freedom was obtained this month in an arrangement between Islamic State and Chaldean church representatives.

Islamic State runs at least four security organisations in Mosul . The most feared groups are an elite security committee that makes special arrests and gathers intelligence; and the Islamic moral police, or Hisba, that enforces the jihadists’ brand of religious law.

The religious code enforced by Hisba includes bans on smoking and on t-shirts with English writing.