Islamic State forces shelled the Syrian border town of Kobani on Saturday and its Kurdish defenders said they were expecting a new assault to try to capture it.

US-led coalition warplanes had struck at Islamic State targets overnight to halt the insurgents' advance and Saturday's barrages were less intense than the previous day.

"Clashes continue now, they are shelling on all three fronts. They tried to invade Kobani last night but they were repelled," senior Kurdish official Asya Abdullah told Reuters from the town on Saturday.

"We think they are planning to launch another big attack but YPG is prepared to resist them," she said, referring to the Kurdish armed group defending it.

Previous coalition air strikes have failed to stop the insurgent offensive and an estimated 180,000 people have fled across the border into Turkey to escape the fighting around Kobani - a conflict now overshadowing Syria's wider civil war.

Islamic State said they would take the town within days and boasted they would pray in its mosques for the Muslim religious festival of Eid al-Adha, which began on Saturday.

In Istanbul, Turkish President Tayyip Erdogan reacted angrily to comments by US Vice President Joe Biden suggesting that Turkey had supported groups in Syria linked to al Qaeda.

Turkey has up to now been a reluctant partner in the US-led coalition of Western and regional allies and the new dispute could complicate international efforts to present a united front against Islamic State.

The insurgents stepped up their offensive close to the Turkish border last month, seizing surrounding villages and advancing to within a few kilometres (miles) of Kobani, also known as Ayn al-Arab. Its capture would allow Islamic State to consolidate its hold on swathes of territory in Syria and Iraq.

Swift offensives by Islamic State since June have sent shockwaves through the region and prompted the United States and its allies to carry out a series of bombing raids to halt the insurgents' rapid advance.

ADVANCES IN IRAQ

Islamic State fighters also extended their area of control in northern and western Iraq on Saturday, seizing the town of Kubaisa and threatening the Ain al-Asad military base, which allows Iraqi forces to send troops and supplies to defend the Haditha dam further west.

Rami Abdelrahman, who runs the Britain-based Syrian Observatory for Human Rights, said several hundred people had been killed on both sides since the assault on Kobani started two weeks ago.

The rumble of artillery could be heard on both the eastern and western flanks of the town on Saturday but the barrage was less intense than on the previous day, a Reuters witness said.

Coalition warplanes destroyed one insurgent vehicle and killed five fighters during raids in the countryside to the east and south of Kobani on Friday night, the observatory said. Ten Kurdish fighters were also killed in heavy fighting that carried on long into the night.

Turkey has so far taken a back seat in the fight against Islamic State, who until last month held 46 Turks as hostages.

But their release and a decision by parliament to renew a mandate allowing Turkish troops to intervene in Syria and Iraq have raised the prospect of a more active role by Turkey.

Erdogan on Saturday warned against any attack on Turkish soldiers stationed at Suleyman Shah's tomb, a Turkish exclave in Syria now entirely surrounded by Islamic State fighters.

"If anything happens there, we cannot hesitate, and everything will change," he said.

He also reacted angrily to comments made by Biden in which the US vice president said Turkey and other countries in the region had been so determined to topple Syrian President Bashar al-Assad that they had supported extremist groups including al Qaeda and the al Nusra Front.

"If Biden has used such expressions, then Biden is history for me from now on," Erdogan said, demanding an apology.

He denied Turkey had given assistance to any hardline militant group or allowed foreign fighters to cross the border.

STRONGEST COMMENTS

Biden's comments in an address to Harvard University students on Thursday were the strongest yet from a senior US official on Turkey's alleged support for Islamist groups in Syria's three-year-old civil war. Erdogan has repeatedly called for the Assad government to be ousted.

"They poured hundreds of millions of dollars and tens of thousands of tons of weapons into anyone who would fight against Assad," Biden said. "Except that the people who were being supplied were al Nusra and al Qaeda and the extremist elements of jihadis coming from other parts of the world."

United Arab Emirates Minister of State for Foreign Affairs Anwar Gargash demanded an official explanation for Biden's remarks, which he said had created "a negative and untrue impression about the role of the UAE", according to the state news agency WAM. UAE is one of the Arab countries that have sent fighter planes to join US air strikes against Islamic State.

The White House said Biden had spoken with Erdogan to clarify his comments at Harvard and apologise for "any implication that Turkey or other Allies and partners in the region had intentionally supplied or facilitated the growth of ISIL (Islamic State) or other violent extremists in Syria".

It said Biden had made clear that Washington valued the commitments and sacrifices made by partners including Turkey and the Gulf states to combat Islamic State.

In Damascus, Assad made a rare public appearance at a mosque to celebrate Eid al-Adha, a picture from the presidency's official Twitter feed showed.

Islamic State militants responded to the international campaign against them by beheading captured British aid volunteer Alan Henning - the fourth Western hostage killed in recent weeks.

The killing, announced in a video released on Friday, drew immediate condemnation from Western leaders, with British Prime Minister David Cameron saying it showed "just how barbaric and repulsive these terrorists are".

A British Islamic State fighter identified as Abu Saeed al-Britani appeared in a separate video urging British Muslims to travel to Syria and Iraq to join Islamic State and accusing British and US soldiers of being "cowards". – Reuters