Experts say the extremist Sunni insurgency that has captured swathes of land in Iraq and Syria faces a "monumental feat" in its unlikely bid to create a global Islamic caliphate.

The Islamic State in Iraq and Syria (ISIS) has declared a caliphate , an announcement that marked an expansion of the group's ambitions to wage a holy war and pose a direct challenge to the central leadership of Al Qaeda, which has already disowned it.

A caliphate is an Islamic state, headed by a caliph who has governance over all Muslims and promotes Sharia law.

In theory, the decisions of the caliph - also referred to as the Prince of the Faithful - would be binding on all groups across the Muslim world.

But Dr Raihan Ismail from the Centre for Arab and Islamic Studies at the Australian National University says the odds of a genuine caliphate being accepted worldwide are "unrealistic".

"Islam is not monolithic, it's diverse. It's very difficult to see Muslims uniting under one banner," Dr Ismail said.

"There are so many interpretations of Islamic law. There are so many groups, so many societies, cultural practices and identities. When it comes to what an Islamic state is, that will divide Muslims.

"Most Muslims do not really believe in the caliphate anymore. [Those that do] mostly live in a Muslim state.

"They adore the idea but to implement it... they will think twice and think it's really not so practical."

She has labelled ISIS's declaration a "snub for Al Qaeda" and "a way of gaining followers".

"There are divisions between jihadi groups. Declaring this is saying to Al Qaeda, 'we do not answer to you'. It's a way of saying they are the new boss."

She says Muslim leaders will not take the announcement seriously.

"They do not believe in the ideas being promoted by jihadi groups. They reflect badly on the Muslim community and the concern is that impressionable young Muslims could be radicalised," she said.

"For most Muslims it will not mean anything."

Keysar Trad, a spokesman for the Australian Federation of Islamic Councils, says while some Muslims take the ISIS declaration seriously, establishing a global caliphate would be "very difficult".

"Because the rest of Muslim countries would need to recognise the caliph and that he was the leader of them all," Mr Trad said.

"Although people may wish for it... to think of uniting all the Muslim states together, that's a monumental feat.

"A person or a group can't just declare they are the caliphate. You need the consensus of Muslim scholars... and if they do not, it will have no legitimacy."

The director of the Centre for Islam and the Modern World, Professor Greg Barton, says it could be argued ISIS has succeeded in establishing a caliphate of sorts.

"It depends on where you put your definition [of a caliphate]. It may well be the case to say that ISIS has succeeded but whether it's long-lasting and robust is another thing," he said.

He says there is no chance of a world-wide Islamic caliphate succeeding.

"These groups have a nostalgia for an imagined past where the early caliphates were better than the alternative," he said.

"People would be unhappy with what amounts to an authoritarian power. Modern society is too diverse to have an elected, or unelected body ruling on matters of state or conscience.

"It may be that this experiment by ISIS will be the end of the idea."

The last caliphate was abolished by Turkey's first president, Ataturk, in 1924.

The mechanism under which a caliph is appointed is one of the causes of the schism between Sunnis and Shiites.

Shiites believe a caliph should be a senior religious leader descended from the family of the Prophet Mohammad, but Sunnis believe a caliph should be elected by the people.