Islamic State is talking to al-Qaida about a possible alliance as Iraqi troops close in on IS fighters in Mosul, Iraqi Vice President Ayad Allawi said in an interview on Monday.

Allawi said he got the information on Monday from Iraqi and regional contacts knowledgeable about Iraq.

"The discussion has started now," Allawi said. "There are discussions and dialogue between messengers representing Baghdadi and representing al-Zawahiri," referring to Islamic State leader Abu Bakr al-Baghdadi and Ayman al-Zawahiri, the head of al-Qaida.