By Warren Strobel and Andrew Osborn
LONDON (Reuters) - Iraqi Prime Minister Haider al-Abadi said on Thursday he feared lower revenues from falling global oil prices could hurt his country's military campaign against Islamic State.
Speaking after attending a meeting of members of the U.S.-led coalition against Islamic State in London, Abadi appealed for more training and equipment for his military. He said Iraq's economy had been hard hit by the oil price slump.
"Oil prices have dropped to about 40 percent of their level last year. Iraq's economy and budget relies 85 percent on oil and this has been disastrous for us," he told a news conference.
"We don't want to see a reverse of our military victory due to our fiscal and budget problems."
When asked how the coalition could help, Abadi said Baghdad could be allowed to defer payment for ammunition and weapons.
Kerry and British Foreign Secretary Philip Hammond said the London meeting planned the next steps of the coalition's campaign against Islamic State in Syria, Iraq and elsewhere. That included doing more militarily, more to cut off the group's finances, and more to stem the flow of foreign fighters.
Kerry said the struggle would be a long one but Iraq should not worry it would not have the weaponry to finish the job.
A large consignment of U.S.-made M16 rifles would be arriving in Iraq "very, very shortly," he said.
Kerry said Iraqi ground forces, backed by coalition air strikes, have taken back 700 square km of territory in Iraq from Islamic State. U.S. and allied officials have acknowledged that the fight against Islamic State in Syria will take longer than in Iraq.
Hammond said before the meeting that the coalition could take up to two years to expel Islamic State from Iraq, and that Baghdad's own forces would be incapable of proper combat operations for months.
Abadi met British Prime Minister David Cameron before the meeting and asked for more military training and ammunition.
KURDS CLAIM VICTORIES
Britain has taken part in air strikes against Islamic State forces, trained Iraqi troops, and provided some equipment already. Cameron told Abadi that Britain was ready to help, but stopped short of making any new commitments.
"The threat from extremist terror you face in Iraq is also a threat we face here in the United Kingdom," he said. "We will do everything we can to help stop foreign fighters coming to your country and creating the mayhem we see today."
The meeting took place a day after Kurdish forces in northern Iraq said they had cleared Islamic State insurgents from nearly 500 sq km of territory and broken a supply line between Mosul and strongholds to the west.
(Additional reporting by Kylie MacLellan, Michael Holden, William James and Ahmed Aboulenein; Editing by Stephen Addison and Andrew Roche)