Kurdish fighters halted a thrust by Islamic State jihadists towards the heart of the Syrian border town of Kobane, after the UN warned thousands of civilians risked massacre if it falls.
The pre-dawn attack came after the IS militants captured the defenders' headquarters Friday, sparking fears they would cut off the last escape route to neighbouring Turkey.
Meanwhile, US officials warned that while attention is focused on Kobane, the jihadists have been piling on pressure in Iraq.
US military planes dropped ammunition, food and water Friday and Saturday to Iraqi troops under pressure from IS in north Iraq, the US Central Command said.
The move marked the first time that coalition aircraft airdropped supplies to Iraqi government forces. Similar drops were previously part of humanitarian missions for civilians, such as Yazidis and Turkmen.
Meanwhile British soldiers are in Iraq training the Kurdish peshmerga forces battling Islamic State jihadists, the Ministry of Defence in London said Saturday.
A "small, specialist team" is operating in Arbil, the capital of Iraq's autonomous Kurdistan region, training peshmerga how to use the heavy machine guns Britain supplied in September.
Military chiefs from the 21 countries already committed to the coalition are to meet in Washington this week to discuss strategy, Pentagon officials said.
US defence officials insist the primary focus of the campaign remains Iraq, where there are capable local forces on the ground to work with, particularly Kurds in the north.
Some of Anbar province fell to IS at the start of the year and most of the rest was seized by the Sunni extremists in a lightning sweep through Iraq's Sunni Arab heartland in June.
"I think it's fragile there now," one senior US defence official told AFP.
"They are being resupplied and they're holding their own, but it's tough and challenging."
Car bombs in two Shiite neighbourhoods of Baghdad Saturday killed at least 34 people and wounded 54, police and medical sources said.
- Kobane 'literally surrounded' -
The renewed IS drive in Kobane sparked 90 minutes of heavy fighting before the jihadists fell back, the Britain-based Syrian Observatory for Human Rights said.
US-led coalition warplanes launched two air strikes against IS targets south and east of town early Saturday, said the group, which has a wide network of sources inside Syria.
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The Observatory said a sandstorm later prevented more air raids, while fighting raged in southern Kobane and near the captured headquarters.
The coalition has intensified air strikes against IS, which began its assault on September 16, but the Pentagon says there are limits to what can be done without ground troops.
Small groups of Kurdish fighters were trying to harry the encircling jihadists with operations across the front line, Observatory director Rami Abdel Rahman told AFP.
UN envoy for Syria Staffan de Mistura warned Friday that 12,000 or so civilians still in or near Kobane, including about 700 mainly elderly people in the town centre, "will most likely be massacred" if the town falls.
Kobane was "literally surrounded" except for one narrow entry and exit point to the Turkish border, de Mistura said, urging Ankara to allow volunteers and equipment in to help defend the town.
- Tighter border security -
The Observatory said at least 554 people have been killed in and around Kobane since the IS advance began -- 298 IS militants, 236 Kurdish fighters and 20 civilians.
Turkey has tightened security of its porous border after the fighting in Kobane sparked the exodus of 200,000 refugees over the frontier.
Turkey has been deeply reluctant to allow weapons or Kurdish fighters to cross the border despite repeated nights of protests among its own large Kurdish minority that have left 31 people dead.
The situation is complicated by the close ties between its Kurdish defenders and the outlawed Kurdistan Workers Party (PKK), which has waged a three-decade insurgency for self-rule in southeastern Turkey that Ankara is determined not to embolden.
Reacting to the 31 deaths in Turkey, senior PKK figure Cemil Bayik said the group had called its fighters back to Turkey from bases in Iraq and could resume attacks, threatening a fragile peace process.
"We have warned Turkey. If the state carries on like this then the guerrillas will resume the war of defence in order to protect the people," Bayik told German broadcaster ARD in an interview recorded in Iraq.
Washington has been frustrated over Ankara's reluctance to commit its well-equipped and well-trained forces to the coalition against IS, but reported "progress" after two days of talks in Ankara by the coalition's coordinator, retired US general John Allen.
In Europe, there have been mass demonstrations by Kurds against IS in Germany, Paris, and France, while two people were seriously hurt after radical Muslims attacked a Kurdish protest in the west Austrian city of Bregenz.
Meanwhile a memorial service will be held in Manchester, northwest England, Sunday for Alan Henning, the British hostage beheaded by Islamic State jihadists.