Islamic State has committed its second-biggest civilian massacre in Syria with an attack on the town of Kobani and a nearby village, killing at least 146 civilians so far, a conflict monitor said on Friday.

Fighting between the Kurdish YPG militia and Islamic State fighters who infiltrated the town at the Turkish border on Thursday continued into a second day, said Rami Abdulrahman, head of the Syrian Observatory for Human Rights.

A separate Islamic State attack on government-held areas of the northeastern city of Hasaka was reported to have forced 60,000 people to flee their homes, the United Nations said, warning that up to 200,000 people may eventually try to flee.

The twin attacks launched in the early hours of Thursday marked an Islamic State attempt to go back on the offensive after Kurdish-led forces, supported by US-led air strikes, advanced to within 50 km of Raqqa city, the de facto capital of its self-declared ‘caliphate’.

In both cases, Islamic State has picked targets where it is complicated for the US-led alliance to provide air support. In Kobani, also known as Ayn Al-Arab, aerial bombardment risks civilian casualties in residential areas targeted in the attack.

The US-led alliance has meanwhile avoided bombing Islamic State targets in areas controlled by President Bashar Al-Assad, such as government-held Hasaka - one of his last footholds in the northeast.

The United States and its European and Arab allies have been carrying out air strikes on Islamic State since last year in an effort to roll back the group that has seized wide areas of Syria and Iraq. Washington has ruled out cooperation with Assad.

The attack on the predominantly Kurdish town of Kobani and the nearby village of Brakh Bootan marked the biggest single massacre of civilians by Islamic State since it killed hundreds of members of the Sunni Sheitaat tribe in eastern Syria last year, the Observatory's Abdulrahman said.

The assault included at least three suicide car bombs. The dead included the elderly, women and children, Abdulrahman said.

The Islamic State fighters were reported to number in the low dozens and entered the town in five cars disguised as members of the YPG and Syrian rebel groups.

Fighting was ongoing inside the town, Abdulrahman said.

Kobani was the site of one of the biggest battles against Islamic State in 2014. The Kurdish forces eventually drove the militants out of the town in January with the help of US air strikes and Iraqi Kurdish fighters after months of fighting.

Islamic State advanced rapidly last month, seizing cities in Syria and Iraq. But recent Kurdish advances in Syria shifted the momentum once more. Islamic State fighters have often adopted a tactic of attacking elsewhere when they lose ground.

The group wrested control of at least one district of Hasaka city in its raid there on Thursday. The city is divided into zones run separately by the Syrian government and the Kurdish administration that controls the YPG.

The UN Office for the Coordination of Humanitarian Affairs said an estimated 50,000 people had been displaced within Hasaka city while 10,000 had left northwards towards Amuda town, close to the Turkish border.

Speaking to Syrian state TV, the governor of Hasaka said the city was "safe and secure". He urged people to return home.

But the Observatory said fighting continued in the city. Government forces were carrying out air strikes targeting areas south of Hasaka controlled by Islamic State, it added.

Assad has since late March lost additional areas of northwestern, southern and central Syria to a patchwork of armed groups, including Islamic State, other jihadists, and rebels who profess a more secular vision for Syria.

The government has meanwhile focused on shoring up control over the main population centres of the west, including Damascus, with crucial military support from the Iranian-backed Lebanese group, Hezbollah. - Reuters