ISIS al-Qaida splinter group declares Islamic 'Caliphate'

The move poses a direct challenge to the central leadership of al Qaeda, which has already disowned it, and to conservative Gulf Arab rulers.

The group, previously known as the Islamic State in Iraq and Syria (ISIS), has renamed itself "Islamic State" and proclaimed its leader Abu Bakr al-Baghdadi as "Caliph" - the head of the state, the statement said.

"He is the imam and khalifah (Caliph) for the Muslims everywhere," the group's spokesman Abu Muhammad al-Adnani said in the statement, which was translated into several languages and read out in an Arabic audio speech.

"Accordingly, the "Iraq and Sham" (Levant) in the name of the Islamic State is henceforth removed from all official deliberations and communications, and the official name is the Islamic State from the date of this declaration," he said.

The Sunni Muslim militant group follows al Qaeda's hard-line ideology but draws its strength from foreign fighters, battle-hardened from Iraq.

It seeks to re-create a medieval-style caliphate erasing borders from the Mediterranean to the Gulf and deems Shi'ite Muslims to be heretics deserving death.

"It is incumbent upon all Muslims to pledge allegiance to (him) and support him...The legality of all emirates, groups, states, and organizations, becomes null by the expansion of the khalifah's authority and arrival of its troops to their areas," the statement said.

In Syria, the group has alienated many civilians and opposition activists by imposing harsh rulings against dissent, even beheading and crucifying opponents, in areas it controls.

In Iraq it has been accused by rights groups of carrying out mass executions in the northern city of Tikrit and in Lebanon the group claimed a suicide attack at a hotel on Wednesday.

Charles Lister, Visiting Fellow at the Brookings Doha Center, saw considerable significance in the group's declaration.

"Whatever judgments are made in terms of its legitimacy, (the) announcement that it has restored the Caliphate is likely the most significant development in international jihadism since 9/11.

"The impact of this announcement will be global as al-Qaeda affiliates and independent jihadist groups must now definitively choose to support and join the Islamic State or to oppose it."

Gulf Arab states such as Saudi Arabia are likely to be alarmed by the open declaration of a caliphate that challenges their power and the dynastic system on which it rests. Saudi Arabia fought al Qaeda militants for several years, finally crushing their campaign in 2006.

Fighters from the group overran the Iraqi city of Mosul last month in a lightning action and have advanced towards Baghdad. In Syria they have captured territory in the north and east, along the frontier with Iraq.

The group crucified eight rival rebel fighters in Syria, a monitoring group said on Sunday, and it has frequently fought with al Qaeda's Syrian wing and other armed Islamist groups.