The Islamic State's recruitment of foreign fighters has slowed significantly, Defence Minister Gerry Brownlee says, as the US-led coalition increasingly cuts off sources of funding to the extremist group.
Mr Brownlee is in Brussels for a meeting of countries involved in the fight against the Islamic State (Isis) in Iraq and Syria.
He said the gathering was an opportunity to assess the progress in combating Isis, and reports at the meeting were encouraging.
Iraqi security forces were pushing Isis forces back and gaining significant tracts of land, though its members still held two large cities, Mosul and Raqqa.
It was an "optimum time" to knock Isis back even further, Mr Brownlee said, because its recruitment efforts were "on the downward spiral".