The fight to retake Mosul was launched more than eight months ago and has displaced more than 850,000 people.
ISIS, through its news agency, blamed U.S. warplanes for the loss of the Great Mosque of al-Nuri and its minaret.
Smoke billows as members of the Iraqi Counter Terrorism Service advance towards the Old City of Mosul on June 20, 2017 during the ongoing offensive by Iraqi forces to retake the last district still held by Daesh militants.
IS leader Abu Bakr al-Baghdadi was proclaimed an Islamic caliphate on June 29, 2014 in Al-Nuri Mosque shortly after his forces conquered what was then a city of 2 million inhabitants. It was the first and last time the leader of the terrorist group spoke publicly to his followers.
Isis say that the USA was responsible for the bombing that destroyed the mosque, according to Amaq, the group's news agency.
But Col. Ryan Dillon, the American coalition spokesman for Iraq and Syria, said in a phone interview Wednesday "that the coalition did not conduct a strike at the time when the mosque was destroyed".
Given the mosque's place in ISIS' own recent history, Iraqi Prime Minister Haider al-Abadi said ISIS had admitted it was defeated in Mosul by blowing it up, AFPreported.
Gen. Joseph Martin, commander of the coalition fighting ISIS in Iraq and Syria, said in a statement.
In a statement posted online after the Ministry of Defense statement, IS claimed an airstrike carried out by the United States destroyed the mosque and minaret. His black flag has been flying over its famous leaning minaret since June 2014.
In 2014, ISIS leader al-Baghdadi, whose own fate is now unknown, spoke in the mosque and declared a caliphate.
The various Iraqi forces pushing into the Old City made modest gains, as IS fighters rained mortar fire on their positions and offered stiff resistance.
If ISIS did blow up the historic mosque, it would just be the latest instance of the terror group destroying or damaging historic sites after it took control of large swaths of Iraq and Syria.
- In July 2014, extremists in Mosul destroyed what was believed to be the tomb of Jonah, a key figure in Christianity, Judaism and Islam.
As many as 100,000 civilians remain under the terrorist group's control in the western part of the city, according to the United Nations, many of which are being used as human shields.
The Syrian military announced the recapturing of Palmyra in March.
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The report of al-Baghdadi's death comes as the Islamic State suffers major setbacks in which it has lost wide swaths of territory. Russian state media reports Al-Baghdadi may have been killed in the May 28 airstrike near the Syrian city of Raqqa.