Outgunned Kurdish militia were struggling to prevent the jihadists closing off the last escape route for civilians still in the area, prompting an appeal Friday for urgent military assistance.
US-led warplanes have intensified air strikes against IS, which has been attacking Kobane for three weeks, but the Pentagon has said that there are limits to what can be done without troops on the ground.
Washington also warned that the military campaign could lead to reprisal attacks "against US, Western and coalition partner interests throughout the world".
The jihadists' advance has brought the front line to just 1.3 kilometres (little more than three-quarters of a mile) from the Turkish border but Ankara has so far refrained from any action against the jihadists.
Four straight nights of protests among Turkey's large Kurdish minority have left 31 people dead as anger flared over the government's lack of action to save Kobane.
IS now controls 40 percent of the town, according to the Britain-based Syrian Observatory for Human Rights.
As fighting raged, an IS suicide bomber struck to the west of the Kurdish headquarters in Kobane killing two people, and 10 Kurds were killed in an IS ambush on the south side of town, the Observatory said.
US planes conducted nine new airstrikes in Syria on Thursday and Friday, the US military said.
An AFP correspondent on the Turkish side of the border saw a cloud of white smoke rising above Kobane after coalition strikes Friday.
- Thousands could be 'massacred' -
UN envoy for Syria Staffan de Mistura warned that 12,000 or so civilians still in or near Kobane, including 700 mainly elderly people in the town centre, "will most likely be massacred" by IS if the town falls.
Kobane was "literally surrounded" except for one narrow entry and exit point to the border, de Mistura said.
The envoy called on Turkey, "if they can, to support the deterrent actions of the coalition through whatever means from their own territory."
"We would like to appeal to the Turkish authorities in order to allow the flow of volunteers at least, and their equipment to be able to enter the city to contribute to a self-defence operation," he said in Geneva.
The United States reported "progress" in pressing Turkey to participate in the fight against the Islamic State group, noting a pledge from Ankara to train and equip moderate Syrian rebels.
The head of the US-led coalition, retired general John Allen, and US pointman on Iraq, Brett McGurk, completed a two-day visit in Turkey to press the NATO ally to engage militarily against the jihadist group.
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Washington had been frustrated over Ankara's reticence to commit its well-equipped and well-trained forces in the fight against the militants.
Asked if the Turkish-US meetings -- attended by Prime Minister Ahmet Davutoglu and military officials -- had led to "progress", State Department deputy spokeswoman Marie Harf said yes.
"Turkey has agreed to support, train and equip efforts for the moderate Syrian opposition," one of the main components of US strategy in Syria unveiled September 10 by US President Barack Obama.
Meanwhile the European Union called for greater international cooperation, including from Turkey, in the fight against IS.
- 'Willing to die' -
Kobane activist Mustafa Ebdi said the IS militants were using civilian cars with Kurdish flags to avoid coming under attack by coalition aircraft.
He said the risk of Kobane falling was high, and described the town as a "symbol of resistance to IS in Syria".
"Every Kurdish fighter is willing to die," he said.
The situation is complicated by the close ties between the town's Kurdish defenders and the outlawed Kurdistan Workers Party, which has waged a three-decade insurgency for self-rule in southeastern Turkey.
Ankara has been deeply reluctant to allow weapons or Kurdish fighters to cross the border.
More than 180,000 people have been killed in Syria since an uprising against President Bashar al-Assad's regime began in 2011, escalating into a multi-sided civil war that has drawn thousands of jihadists from overseas.
Regime bombardment and air strikes killed at least 21 civilians, eight of them children, in the south and northeast of the country Friday, the Observatory said.
In Iraq, meanwhile, IS fighters executed 13 people, including cameraman Raad al-Azzawi who worked for a local television station.
With the violence showing no sign of abating, US defence officials said military chiefs from 21 countries in the coalition would gather next week in Washington to discuss the crisis.
The meeting will include all the European partners and all five Arab states taking an active role -- Bahrain, Jordan, Qatar, Saudi Arabia and the United Arab Emirates, officials told AFP.
Australia is also expected to send its military chief.