American war planes have reportedly launched a strike on a gathering of ISIS leaders, critically wounding their leader.
Abu Bakr al-Baghdadi was hurt in the strikes today, according to local witnesses and government sources.
Two witnesses confirmed that bombs had fallen on the town of al-Qaim, next to the Syrian border.
Local government sources described how an aircraft had swooped over a meeting of senior ISIS figures and dropped its payload, killing more than a dozen people.
Another witness said that eight people had died when a bomb struck a market.
A local hospital was said to be overwhelmed with the volume of patients from the raid - including al-Baghdadi.
Local ISIS officials were reportedly roaming the streets with loudspeakers ordering residents to donate blood to help the wounded.
Striking Baghdadi would be the most significant blow yet in the campaign against ISIS, who have been defiant in the face of sustained air attacks from the US Air Force and allies.
A provincial leader from Anbar in western Iraq, as well as his deputy, are said to be among those killed instantly by the bombs.
Al-Qaim and the neighbouring Syrian town of Albukamal are on a strategic supply route linking territory held by Islamic State in Iraq and Syria.
The so-called Caliph, who declared himself leader of all the world's Muslims in a televised speech, was formerly a prisoner of the US during their occupation of Iraq.
The shady figure was eventually released, and rose through the ranks of the jihadist groups which eventually united to form ISIS, or the Islamic State.
Iraqi security officials could not immediately comment on the reported raid. The US military did not confirm or deny the strike.
Western and Iraqi officials say U.S.-led air strikes are not enough to defeat the al Qaeda offshoot and Iraq must improve the performance of its security forces to eliminate the threat from the group, which wants to redraw the map of the Middle East.
President Barack Obama has approved sending up to 1,500 more troops to Iraq, roughly doubling the number of US forces on the ground, to advise and retrain Iraqis in their battle against Islamic State.
The Iraqi prime minister's media office said the additional US trainers were welcome but the move, five months after Islamic State seized much of northern Iraq, was belated, state television reported.
The United States spent $25billion on the Iraqi military during the US occupation that toppled Saddam Hussein in 2003 and triggered an insurgency that included al Qaeda.
Washington wants Iraq's Shi'ite-led government to revive an alliance with Sunni tribesmen in Anbar province which helped US Marines defeat al Qaeda.
Such an alliance would face a more formidable enemy in Islamic State, which has more firepower and funding.
Police Colonel Shaaban Barazan al-Ubaidi, commander of a rapid reaction force in Anbar, said security forces retook eight villages. His account could not be immediately confirmed.
By Kieran Corcoran
© Associated Newspapers Ltd.