Al Qaeda Denies Decline, Acknowledges 'Mistakes' By Its Branches

(Reuters) -- Al Qaeda dismissed as "lies" a U.S. assessment that it is in decline, but a defiant online message issued by the network on Sunday made no mention of the ultra-hardline Islamic State group widely seen as its rival for the leadership of global jihad.

"Whatever slip-ups or errors (regional branches) ... may have committed are limited in number in the midst of mountains of good deeds and successes," said Hossam Abdul Raouf, an Egyptian veteran of the militant group. He said compensation and apologies had been given to unintended victims but gave no details.

Raouf, who served under assassinated leader Osama bin Laden, said the group was expanding across the world.

Al Qaeda faces a challenge to its leadership of the radical Islamist struggle with the West by the Islamic State group, and may be seeking to burnish its credentials as its rival girds for a fight to protect land it has seized in Iraq and Syria.

The United States and Arab neighbors pledged to fight IS last week, and American warplanes have pounded its positions in Iraq for more than a month.

IS 'CALIPHATE'

Islamic State's declaration of a "caliphate," or religious state over its lands has not been recognized by al Qaeda, which has produced a series of videos in recent weeks detailing its own activities but shying away from criticizing IS.

IS released a video on Saturday night showing the beheading of a British hostage, its third such publicized murder.

The U.S. State Department in its annual terrorism report published in April said: "As a result of both ongoing worldwide efforts against the organization and senior leadership losses, AQ core's leadership has been degraded, limiting its ability to conduct attacks and direct its followers."

The U.S. has repeatedly killed top al Qaeda leaders, including Bin Laden, in the group's haven on the Afghanistan-Pakistan border, where its leaders live under the protection of local militants to whom they swear allegiance.

Global affiliates of the group, however, have grabbed territory and harassed Western-backed governments in Somalia, Algeria and Yemen - attacking soldiers, bombing government installations and often killing civilians.

"How then can al Qaeda have shrunken greatly and lost many of its senior leaders at a time when it is expanding horizontally and opening new fronts dependent on it?" Raouf said, although he said these groups had often erred.

Al Qaeda fell out with IS -- whose roots lie in Iraq -- in 2013 over its expansion into Syria, where the militants have carried out beheadings, crucifixions and mass executions.

The global group's leader, Ayman al Zawahiri, designated the Nusra Front, another jihadi group that has clashed with IS, its representative in Syria.

Counter-terrorism experts say al Qaeda's aging leadership is struggling to compete for recruits with the Islamic State, which has galvanized young followers, seized advanced weapons from Iraqi and Syrian forces while accruing a vast store of cash.