US President Barack Obama vowed Tuesday not to let the Islamic State build a base in Libya, saying the United State would take action where there was a "clear target."

"We are working with our other coalition partners to make sure that, as we see opportunities to prevent ISIS from digging in in Libya, we take them," Obama said, using an acronym for the group.

"We will continue to take actions where we got a clear operation and a clear target in mind."

The jihadist group has established a base with thousands of fighters in the coastal city of Sirte.

The hometown of late dictator Moamer Kadhafi, the city is a strategic port near oilfields that could provide a lucrative source of income.

"The tragedy of Libya over the last several years is Libya has a relatively small population and a lot of oil wealth, and could be really successful," said Obama.

Since rebels and Western airpower toppled Kadhafi's regime in 2011, the country has effectively lacked a government.

In the chaos a disparate group of foreign fighters, homegrown militiamen, tribes and remnants of the Libyan Islamic Fighting Group have coalesced around the IS banner and gained a foothold.

Until now, US involvement in Libya has been limited to isolated airstrikes and the deployment of US special forces, who are building ties with local armed groups and providing intelligence.

In November, an American F-16 fighter jet struck the eastern town of Derna, killing Abu Nabil -- also known as Wissam Najm Abd Zayd al-Zubaydi -- the local IS leader.

Obama has asked key advisors to draw up options for ratcheting up the fight against the Islamic State group, including in Libya.