A video published by Islamic State shows the mosque from which they declared their 'caliphate' nearly three years ago lying in ruins. 

Islamic State's Amaq news agency published a video of the destroyed Grand al-Nuri Mosque of Mosul on Thursday, once the podium from which Islamic State declared their 'caliphate' and now in ruins.

It was from this medieval mosque three years ago that the militants' leader Abu Bakr al-Baghdadi declared a self-styled 'caliphate' spanning parts of Syria and Iraq.

The news agency accused American aircraft of destroying the mosque, a claim swiftly denied by the US-led international coalition fighting the hardline Sunni group.

The Iraqi military's media office distributed a picture taken from the air that appeared to show the mosque and minaret flattened in the middle of the small houses of the Old City, the historic district where the militants are besieged.

The explosions happened as Iraq's elite Counter Terrorism Service units, which have been battling their way through Mosul's Old City, got to within 50 meters of the mosque, the Iraqi military statement said.

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