President Barack Obama says the U.S. and NATO allies agreed Friday to take on the Islamic State militants both financially and with military might.

NEWPORT, Wales — The U.S. and nine allies agreed Friday that the Islamic State group is a significant threat to NATO countries and that they will take on the militants by squeezing their financial resources and going after them with military might.

With the Islamic State militants spreading across eastern Syria and northern and western Iraq, President Barack Obama noted that the moderate Syrian rebels fighting both the group and the government of Bashar Assad are “outgunned and outmanned.” In addition to the action pledged by fellow NATO leaders, he pressed Arab allies to reject the “nihilism” projected by ISIL.

The new NATO coalition will be able to mount a sustained effort to push back the militants, Obama said. The U.S. secretaries of State and Defense, meeting with their counterparts at the international gathering, insisted the Western nations build a plan by the time the U.N. General Assembly meets this month.

“So there’s great conviction that we have to act, as part of the international community, to degrade and ultimately destroy ISIL, and that was extremely encouraging,” Obama said.

Laying out a strategy for Iraq, Obama hinted at a broader military campaign, likening it to the way U.S. forces pushed back al-Qaida along Pakistan’s border with Afghanistan, taking out the group’s leadership, shrinking its territory and pounding at its militant followers. To do that, the U.S. used persistent airstrikes, usually by CIA drones.

Obama has set a goal of dismantling and destroying the Islamic State, and said Friday that the U.S. will continue to hunt down the militants just as it did with al-Qaida and with al-Shabab in Somalia.

Secretary of State John Kerry heads to the Middle East next week, and he expects to expand the coalition beyond Western nations.

Said Obama: “I think it is absolutely critical that we have Arab states and specifically Sunni-majority states that are rejecting the kind of extremist nihilism that we’re seeing out of ISIL, that say that is not what Islam is about and are prepared to join us actively in the fight.”

The Islamic State group espouses a radical form of Sunni Islam and initially invaded Iraq to fight its Shiite government.