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Syrian regime fighting Islamic State on edge of Palmyra
They have now progressed "right up to the edge of the town," said Rami Abdel Rahman, director of the Syrian Observatory for Human Rights.
IS extremists killed 15 Syrian soldiers and allied fighters near Palmyra earlier on Friday, taking the government's losses in 24 hours of clashes to at least 49.
IS fighters launched simultaneous attacks on several government positions in the eastern desert of Homs province on Thursday, including areas near the Mahr and Shaar oil and gas fields.
It has seized government checkpoints, silos and the village of Jazal, northwest of Palmyra, in the ongoing assault, the Observatory said.
The army has brought in reinforcements and carried out air raids against IS in a bid to retake lost territory.
The extremists too have suffered losses, the Observatory said, although it had no immediate figure.
IS once held several key towns in Homs province, including Palmyra.
It overran the town in May last year, and systematically destroyed temples and tower tombs at the town's UNESCO World Heritage site, before being pushed out by government forces.
It is still present in parts of the east of the province, and has carried out hit-and-run attacks on government positions in recent months.
But Abdel Rahman said the current assault was the first to see IS seize territory since it was pushed out of most of the province.