Despite setbacks on the battlefield in Syria and Iraq, the Islamic State group retains a "solid base of dedicated supporters" online, Europe's policing agency warned on Friday.

Jihadist groups are also now using smaller internet platforms and forums to spread terror propaganda, Europol added. 

"The relative decrease of 'official' IS propaganda over the last month has allowed more room for pro-IS user generated content," the agency said in a statement from its Hague-based headquarters.

"This indicates that the so-called Islamic State organisation continues to have a solid base of dedicated supporters in the virtual environment of the internet," it said.

The agency released its findings after a two-day joint operation earlier this week to seek out and flag content posted by jihadist groups on the internet.

Europol's Internet Referral Unit teamed up with counter-terror and online propaganda experts from Bosnia and Herzegovina, the Czech Republic, Estonia and Hungary.

"Jihadist organisations and their supporters continue to abuse a variety of platforms for disseminating their propaganda," Europol said.

"However, the disruptive actions undertaken by certain service providers to safeguard their platforms has led jihadist sympathisers to move to 'smaller' platforms."

Some sympathisers have also reverted back to using internet forums, as well as so-called "Darknet libraries" which shares links pointing to jihadist content on the open internet, Europol said.

The agency said it has flagged 1,029 pieces of content promoting terror on the internet to service providers with the request to have it removed if it violated their terms and conditions.

Some countries, like Britain, have already announced plans to clamp down on extremist online content, following attacks in London and Manchester earlier this year.

Prime Minister Theresa May also wants internet companies to develop tools to automatically identify and remove harmful material, based on what it contains and who posted it.

In addition, May wants companies to block users who post extremist content, and alert authorities when they identify material that could be harmful.

IS has suffered a string of defeats on the battlefields of both Iraq and Syria, leaving in tatters the cross-border "caliphate" it declared in 2014.

Syria's Russian-backed army is this week battling to oust IS from the provincial capital Deir Ezzor city, after breaking the jihadist group's two-year siege of government-held parts of the metropolis.

US-backed pro-government forces recaptured the Iraqi city of Tal Afar and the surrounding region from IS on August 31.