IS launch surprise offensive and capture parts of key Syria border city
The surprise assault saw 25 regime and pro-Damascus militia fighters killed, with IS now making their way towards the city centre.
"It's the biggest attack on Albu Kamal since they lost it," said Rami Abdel Rahman, the head of the UK-based Observatory.
"IS now controls several parts of the city. Fighting is ongoing in the centre."
Albu Kamal lies on Syria's border with Iraq in the eastern Deir az-Zour province.
It was one of the last cities under IS control, until Syrian regime troops and Iranian-backed fighters managed to win it in November 2017.
IS once ruled over huge expanses of Syria and Iraq, with much of the border between the two countries under the jihadis' control.
The group now only control a few small towns and villages in the Euphrates Valley region of Syria, but analysts warn that IS have the potential to re-ground and win back territories.