An Iraqi military parade in Baghdad's heavily fortified Green Zone celebrated final victory over Islamic State on Sunday, with Prime Minister Haider al-Abadi looking on as troops marched in formation, their bodies spelling "victory day" in Arabic.

Abadi, who is also commander-in-chief of the armed forces, listened solemnly to Quranic verses from a chapter titled al-Nasr, meaning victory.

Iraqi forces recaptured the last areas still under Islamic State control along the border with Syria on Saturday and secured the western desert, marking the end of the war against the militants three years after they had captured about a third of Iraq's territory.