Experts and sources in Libya say Sirte has become a new focal point for the jihadist group as it comes under increasing pressure in its traditional Iraqi and Syrian power bases.
"It is clear 'IS central' made an investment on Libya a long time ago," in a strategy dating back almost two years, said Mattia Toaldo, policy fellow at the European Council on Foreign Relations.
"Foreign fighters from North Africa are increasingly flocking to Sirte rather than going all the way to Syria."
Exploiting the chaos in Libya as rival militias and governments battled for power, IS seized Sirte in June, beheading and putting on crosses the bodies of militiamen who had been fighting them in the coastal city.
Officials in the army loyal to the internationally recognised authorities in the east say Sirte, the hometown of slain dictator Moamer Kadhafi, has become a destination of choice for new recruits.
"Sirte is now the centre... where new recruits are trained and instructed in the ideology of IS," said Mohamed Hijazi, a spokesman for the military led by General Khalifa Haftar.
"Hundreds of foreign fighters have flowed in from Tunisia, Sudan, Yemen and Nigeria to be trained and ready to carry out attacks in other countries," said an army colonel who spoke on condition of anonymity.
A foreign ministry source said the number of IS recruits in Sirte was "several thousand" and growing, thanks to the "pressure" the jihadists are being put under in Iraq and Syria.
Another government official, using an Arabic acronym for IS, said the "strikes against Daesh (in Iraq and Syria) could force it to relocate its leaders and command centres to Libya."
The United Nations, in a report issued on Tuesday, estimated that the number of IS fighters in Libya is 2,000 to 3,000, including 1,500 in Sirte.
'EVERYTHING HAS CHANGED'
"Everything has changed in Sirte. Daesh fighters roam the streets as though at home," said a former leader in Sirte's local council.
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"They do checks to make sure people aren't skipping prayers and enforce sharia law, and women are rarely seen" in public, said the former official who fled to Misrata, located half-way along the coast to the Libyan capital.
IS strives to give the impression that life in Sirte is normal, staging events to publicise the opening of new bakeries or butcher shops while distributing videos of punitive amputations.
"Islamic State recognises that the chaotic situation in Libya offers it the opportunity to develop its influence network," said risk analysis firm Verisk Maplecroft.
"It is likely to be able to maintain a substantial presence that supports its network across the region for as long as the civil war persists."
In Paris, French Prime Minister Manuel Valls said the situation in the conflict-riddled country will be "the big issue in the coming months", noting how "terrorism constantly mutates".
Former colonial power Italy is pressing for an international summit on Libya along the same lines as a recent conference in Vienna aimed at ending the nearly five-year-old war in Syria.
It has set a December 13 date for a conference in Rome aimed at preventing the total collapse of Libya and halting the advance of IS.
But for now there is no political solution in sight to end Libya's conflict, with UN-brokered talks on the formation of a national unity government failing in the autumn and yet to resume.
Meanwhile, the jihadist group is trying to expand its zone of influence to Ajdabiya.
Controlled by militias loyal to the recognised government, the city lies between Sirte and Benghazi in an area where most of the country's oil and gas terminals are clustered.
IS is also fighting in some parts of the cities of Benghazi and Derna.
"ISIL is an evident short- and long-term threat in Libya," said Tuesday's UN expert report, using another name for IS.
But it added that the jihadists face "strong resistance from the population as well as difficulties in building and maintaining local alliances".