Fighters in Syria and Iraq have announced the establishment of a "caliphate", referring to the system of rule that ended nearly 100 years ago with the fall of the Ottomans.

In an audio recording distributed online on Sunday, the Islamic State of Iraq and the Levant (ISIL) declared its chief Abu Bakr al-Baghdadi as "the caliph" and "leader for Muslims everywhere".

Baghdadi is believed to be the leader of ISIL

ISIL announced that it is now called "The Islamic State". Al Jazeera's Imran Khan explained that a caliphate is effectively an Islamic Republic led by one leader, regardless of national boundaries.

According to the statement, the new caliphate stretches from Iraq's Diyala province to Syria's Aleppo.

With the announcement, the armed group is declaring that they are now legitimate, declaring the caliphate as the "true muslim state," our correspondent explained.

He added that this announcement might bring up problems with other Sunni fighters in Iraq, who are fighting the central government of Prime Minister Nouri al-Maliki, and not fighting for the caliphate.

Al Jazeera