By Stephen Kalin and Dominic Evans

KOKJALI/BAGHDAD, Iraq (Reuters) – With Iraqi troops battling inside the Islamic State bastion of Mosul, the militants’ leader told his followers there could be no retreat in a “total war” against the forces arrayed against them.

Expressing confidence that his Islamic State fighters would prevail against Shi’ite Islam, Western “crusaders” and the Sunni “apostate” countries of Turkey and Saudi Arabia, Abu Bakr al-Baghdadi called on the jihadists to “wreak havoc”.

“This raging battle and total war, and the great jihad that the state of Islam is fighting today only increases our firm belief, God willing, and our conviction that all this is a prelude to victory,” Baghdadi said in an audio recording released online by supporters on Thursday.

Iraqi regular troops and special forces, Shi’ite militias, Kurdish peshmerga fighters and other groups backed by U.S.-led air strikes launched a campaign two weeks ago to retake Mosul.

Winning back the country’s second biggest city would mark the defeat of the Iraq wing of a crossborder caliphate which Baghdadi declared from the pulpit of a Mosul mosque two years ago. Islamic State also holds large parts of neighboring Syria.

In his first audio message released in nearly a year, Baghdadi called on the population of Mosul’s Nineveh province “not to weaken in the jihad” against the “enemies of God”.

He also called on the group’s suicide fighters to “turn the nights of the unbelievers into days, to wreak havoc in their land and make their blood flow as rivers”.

Addressing those who might consider fleeing, he said: “Know that the value of staying on your land with honor is a thousand times better than the price of retreating with shame.”

ROCKET FIRE

Shortly after Baghdadi’s speech was released at around 2 a.m., residents said heavy explosions shook eastern Mosul. One said the militants fired dozens of rockets toward the Intisar, Quds and Samah districts where soldiers have been closing in.

“We heard the sounds of rockets firing one after the other and saw them flashing through the air. The house was shaking and we were terrified, not knowing what was taking place.”

Fighters were on the street, unusually showing their faces, he said. “They were saying ‘We will fight till death. The caliph gave us a morale boost to fight the infidels’,” he said.

Another witness from the Hadba neighborhood of north Mosul said that Islamic State vehicles patrolled the area and blasted out Baghdadi’s speech, urging fighters to hold their positions.

Outside the city’s eastern limits, hundreds of civilians streamed away from the conflict, packed into cars, pickups and trucks, waving white flags and hooting horns. Cows and sheep also filled the road from Kokjali, on the eastern edge of Mosul.

Many were from Kokjali itself, which was cleared of Islamic State fighters by Iraq’s elite Counter Terrorism Service troops earlier this week.

Fleeing residents said there had been heavy mortar fire launched by retreating Islamic State fighters.

By mid-morning, a Reuters correspondent in the Kokjali district of the city saw smoke rising from inside Mosul but there were no sounds of fighting.

Lieutenant-General Talib Shaghati said CTS troops were on the edge of the eastern Karama, Intisar and Samah districts.

The exact location of Baghdadi, an Iraqi whose real name is Ibrahim al-Samarrai, is not clear. Reports have said he may be in Mosul itself, or in Islamic State-held land to the west of the city, close to the border with Syria.

British Foreign Secretary Boris Johnson said intelligence suggested that Baghdadi had “vacated the scene”, but he did not say where the Islamic State leader might be.

The authenticity of the 31-minute-long recording could not be immediately verified, but the voice and style closely resembled those of previous speeches Baghdadi has delivered.

The recording appeared to be recent as it focused on the Mosul offensive, although he did not mention the city by name.

Mosul still has a population of 1.5 million people, much more than any of the other cities captured by Islamic State two years ago in Iraq and neighboring Syria.

Iraqi troops and Kurdish peshmerga fighters have been advancing on Mosul for two weeks from the north, from the eastern Nineveh plains and up the Tigris river from the south.

The Hashid Shaabi (Popular Mobilisation) forces of mainly Shi’ite militias joined the campaign on Saturday, launching an offensive to cut off any supply or escape to the west.

The leader of the Badr Organisation, the largest of the Popular Mobilisation militias, said his forces would cut off the main western supply route on Thursday, leaving Islamic State surrounded.

Brett McGurk, U.S. President Barack Obama’s counter-Islamic State envoy, said the Mosul campaign was ahead of schedule. “Iraqi forces enter eastern neighborhoods of Mosul this morning. New advances on all axes,” McGurk tweeted.

Senior Kurdish politician Hoshiyar Zebari said in a tweet that Islamic State blew up parts of a bridge linking the eastern and western sides of the city to try to prevent its fighters abandoning the eastern districts. Residents said there had been an explosion at the bridge but said the cause was not clear.

TARGETING TURKEY AND SAUDI

In a sectarian speech, Baghdadi called for attacks on both Turkey and Saudi Arabia, saying the Sunni countries had both sided with the enemy in a war he said was targeting Sunni Islam.

Islamic State fighters should “unleash the fire of their anger” on Turkish troops fighting them in Syria, and take the battle into Turkey.

“Turkey entered the zone of your operations, so attack it, destroy its security, and sow horror within it. Put it on your list of battlefields. Turkey entered the war with the Islamic State with cover and protection from Crusader jets,” he said referring to the U.S.-led air coalition.

Baghdadi also told his followers to launch “attack after attack” in Saudi Arabia, targeting security forces, government officials, members of the ruling Al Saud family and media outlets, for “siding with the infidel nations in the war on Islam and the Sunna (Sunni Muslims) in Iraq and Syria”.

Islamic State has been on the retreat since last year in both Iraq and Syria, in the face of a myriad of different forces seeking to crush the ultra-hardline group.

In addition to the forces marching on Mosul, it faces a broad range of foes in neighboring Syria. There it is fighting Turkish-backed Syrian rebels opposed to President Bashar al-Assad and U.S.-backed Kurdish fighters, as well as Russian- and Iranian-backed Syrian army units loyal to Assad and foreign Shi’ite militias.

(Additional reporting by Ahmed Tolba and Mostafa Hashem in Cairo, and Maher Chmaytell and Saif Hameed in Baghdad; editing by David Stamp)