Following heavy losses in Yemen's Abyan and Shabwa provinces, the extremist group is weakened, and is having trouble raising tribal support.
Iraqi forces have tracked down and targeted ISIS remnants in their hideouts during a series of operations in provinces across the country.
A senior al-Qaeda figure identified as Hamad bin Hamoud al-Tamimi and his bodyguard died in a strike that targeted his rental home.
Three al-Qaeda elements were killed in the strike, including Hassan al-Hadrami, who reportedly manufactured explosives for the group.
Recent deadly attacks in Mudiyah district have sparked alarm in the southern province, but observers note the attackers' limitations.
The expected designation follows MI5 director general's accusation that IRGC is plotting to kidnap and potentially kill UK-based dissidents.
The Houthis' threats to attack shipping lanes and the fresh deployment of IRGC experts to the Red Sea coast have raised concern in Yemen.
It is possible that al-Qaeda has so far failed to make contact with al-Zawahiri's most likely successor, Egyptian extremist Saif al-Adel, analysts say.
Even as reconstruction moves slowly and economic conditions are still dire, residents of Iraq's once thriving cultural centre of Mosul hail the improved security situation.
Left without a sanctuary or charismatic leader, ISIS has lost much of its credibility and power, and is scrambling to remain relevant, analysts say.