IS loses main supply route between Syria and Turkey
"The Syrian Democratic Forces (SDF) cut off the last road from Manbij to the Turkish border on Friday morning," the Syrian Observatory for Human Rights said.
The road was the latest to be seized after days of fighting focused on Manbij city.
This week, the US-backed forces – which launched an operation in the area in May 2016 – recaptured the road north of Manbij which leads to the IS-controlled border town of Jarabulus, a key transit point for militants, money and weapons.
The SDF also blocked the road south out of Manbij heading to the group's de facto capital of Raqqa.
Since the operation began in May, 190 casualties were reported by the Observatory – 132 of which were alleged Islamic State militants.
"Most of the Daesh fighters were killed in air raids by the international (US-led) coalition," Abdel Rahman told AFP, using an Arabic acronym for the group.
He said dozens of bodies of IS fighters had been found on Thursday morning in small villages east of Manbij.
Coalition air raids supporting the assault also killed at least 30 civilians, including 11 children, the Observatory said.
"For the jihadists to reach the Turkish border from Raqqa, they now have to take a route that is more dangerous because of regime troops nearby and Russian airstrikes," Observatory head Rami Abdel Rahman said.
IS still controls territory along the Turkish border with secondary roads to the frontier but these are more dangerous and difficult to access, Abdel Rahman said.
Washington hopes the operation will choke off Islamic State's last major link to the outside world, as the militants have used the border for years to receive supplies and manpower, and more recently to send back fighters for attacks in Europe.
If Manbij is captured, it will be the extremists' biggest defeat in Syria since government forces captured the central historic town of Palmyra in March.