By Patricia Zengerle and Yara Bayoumy

WASHINGTON (Reuters) - President Barack Obama's special envoy for the fight against Islamic State said on Tuesday that coalition forces were making progress and planning assaults on key cities in Iraq and Syria, but U.S. lawmakers criticized the progress as too slow.

Brett McGurk testified at a U.S. Senate Foreign Relations hearing that morale is falling within the militant group as it loses territory. But he said efforts to find a political solution were making little progress and could not predict an end to fighting as long as Syrian President Bashar al-Assad remained in power.

"So long as Assad is leading the government in Damascus there is no way this war will ever end," McGurk said. The conflict between U.S.-backed armed groups and Assad's government, supported by Russia and Iran, has complicated the fight against Islamic State amid a massive humanitarian crisis.

Iraqi forces recently entered the Islamic State bastion of Falluja just west of Baghdad, and were pushing north toward Mosul, by far the biggest city that Islamic State controls.

In Syria, U.S.-backed forces were closing in on the militant stronghold of Manbij, and Assad's Russian-backed army has advanced into the province surrounding the de facto Islamic State capital Raqqa.

McGurk said completion of the operation against Manbij would create conditions to move on Raqqa. And he said planning was under way for a campaign to liberate Mosul.

"We're beginning to totally isolate their presence in Raqqa and Mosul and I believe we are setting the conditions in place to get them out of both of these cities," McGurk said.

He offered no timeline for those operations.

Lawmakers said they felt the campaign was moving too slowly, and worried that, without a political solution, defeating Islamic State would leave behind a power vacuum that could be filled by another militant group.

"I don't see how what's left of the political process possibly leads to Assad's departure," said Republican Senator Bob Corker, the committee's chairman.

A massacre two weeks ago in Florida by a gunman inspired by Islamic State drew attention to its efforts to inspire attacks in the west.

McGurk said Raqqa was the center for the group's social media operations, which have become more of a focus as its fortunes have faded on the battlefield.

Discussing the region, McGurk said Washington would like more air resources from coalition allies United Arab Emirates and Saudi Arabia.

"Right now we want to end the war in Yemen in order to really focus efforts on the counter-ISIL campaign," McGurk said, using an acronym for Islamic State, which is also known as ISIS.

(Reporting by Patricia Zengerle and Yara Bayoumy; Writing by Patricia Zengerle; Editing by Richard Chang)