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IS 'besieged' in last bastion in Syria's Aleppo province
"Al-Bab is now completely besieged by the regime from the south, and the Turkish forces and rebels from the east, north and west," said the Syrian Observatory for Human Rights.
The latest development came after "the regime's forces and allied militia seized the only and last main road used by the jihadists between al-Bab and Raqqa," Observatory chief Rami Abdel Rahman told AFP, referring to the militants' de facto capital in Syria.
Regime forces were backed by fighters from the Lebanese Hizballah as well as Russian artillery, said the Britain-based Observatory, which relies on a network of sources on the ground for its reports.
The town of al-Bab, 25 kilometres (15 miles) south of the border with Turkey, is seen as a prize by nearly all sides in the complex war.
The regime of Syrian President Bashar al-Assad has refocused on IS since fully recapturing Aleppo city in December, in the biggest blow to rebels who have been fighting to topple his regime since 2011.
IS is among several militant movements that have shot to prominence during the conflict, which has left more than 310,000 people dead and has forced millions more from their homes.
Assad's forces were also locked in fighting with IS in the central province of Homs at the weekend, the Observatory said.
It reported that the troops had captured the Hayyan oilfield west of the celebrated desert city of Palmyra.
They also fought back against IS around al-Seen military airport northeast of Damascus, said the monitoring group.
Meanwhile, the Syrian Democratic Forces launched the third phase of the campaign to capture Raqqa this week, after gaining ground further up the Euphrates Valley since it began last November.
The SDF "announce the beginning of the third phase to liberate Raqqa and its surroundings, which will target the eastern part of the province," spokeswoman Jihan Sheikh Ahmed said.
Some 750 more Arab fighters had joined the SDF after being trained by the US-led coalition, Ahmed said.
The US-led anti-IS coalition has carried out airstrikes targeting IS in Syria and Iraq since 2014.