Published: 2017-07-11 18:58:04 BdST
Russia's Defence Ministry said in June that it might have killed Baghdadi when one of its air strikes hit a gathering of Islamic State commanders on the outskirts of the Syrian city of Raqqa, but Washington said it could not corroborate the death and Western and Iraqi officials have been sceptical.
Reuters could not independently verify Baghdadi's death.
"(We have) confirmed information from leaders, including one of the first rank, in the Islamic State in the eastern countryside of Deir al-Zor," the director of the British-based war monitoring group Rami Abdulrahman told Reuters.
Baghdadi's death had been announced many times before but the Observatory has a track record of credible reporting on Syria's civil war.
Abdulrahman said Observatory sources in Syria's eastern town of Deir al-Zor had been told by Islamic State sources that Baghdadi had died "but they did not specify when".
Iraqi and Kurdish officials did not confirm his death. The US Department of Defence said it had no immediate information to corroborate Baghdadi's death.
Islamic State-affiliated websites and social media feeds have not carried any news regarding the leader's possible death.
The death of Baghdadi, who declared a caliphate from a mosque in the Iraqi city of Mosul in 2014, would be one of the biggest blows yet to the jihadist group, which is trying to defend shrinking territory in Syria and Iraq.