Syrian Kurdish fighters advanced towards the Islamic State group-held town of Tal Abyad on the Turkish border on Thursday, backed by US-led coalition strikes, a monitor said.
The Syrian Observatory for Human Rights said Kurdish People's Protection Units (YPG) forces backed by Arab rebel fighters "stormed the town of Suluk and took control of the eastern part of it."
Fierce clashes continued through the day between IS and Kurdish forces.
Suluk, in the IS bastion province of Raqa in northern Syria, lies to the east of Tal Abyad, a key border town that is controlled by the jihadist group.
The town is a key target for the Kurds who want to free up the route between Kobane to the west and Qamishli, further east along the Turkish border.
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With their advance into Suluk, YPG forces are now some 20 kilometres (12 miles) east of Tal Abyad, and they are also positioned around 10 kilometres to the west.
"The Kurds plan to lay siege to Tal Abyad," Observatory director Rami Abdel Rahman said.
The YPG has been backed by US-led air strikes targeting IS positions in the area, he added.
The latest fighting in the area has prompted a wave of several thousand people to flee into neighbouring Turkey, which is already hosting 1.8 million Syrians.
A Turkish official told AFP that in the past week 7,000 refugees had fled to Turkey to escape the fighting and another 6,600 had joined them since Wednesday.