Kurdish-led forces battle through IS-held city as thousands flee

US-backed Kurdish and Arab fighters have managed to capture 40 percent of the Islamic State group stronghold of Manbij in northern Syria, a monitor said Sunday.

Syrian Democratic Forces (SDF) had pushed deeper into the town with air cover from the US-led coalition but faced tough resistance from the militants, who are desperate to hold this important logistics artery.

Around 2,300 civilians have fled Manbij in the past 24 hours as Kurdish and Arab fighters advanced, according to the Syrian Observatory for Human Rights.

It said clashes between the joint Kurdish-Arab force and IS fighters were continuing in several parts of the town.

"It's a street battle, and the process of eating away at IS territory is ongoing," Observatory director Rami Abdel Rahman told AFP.

He said the SDF had advanced into eastern parts of Manbij, which is located in Aleppo province on IS' main supply route between Syria and Turkey.

The SDF began its offensive to retake Manbij from IS at the end of May, but progress slowed after it entered the town because of a fierce counteroffensive by the militants.

Thousands of civilians have already fled the city but thousands more are believed to remain trapped.

Earlier in the month, the SDF gave IS an ultimatum to leave Manbij within 48 hours, offering to allow fighters to flee with light weapons in what it described as a bid to protect civilians.

The initiative came after at least 56 civilians, including children, were reportedly killed in US-led air strikes near Manbij.

The coalition has said it is investigating the deaths, which provoked a sharp backlash, including a call from the Syrian opposition National Coalition for the US-led strikes to be suspended.

The 48-hour ultimatum was ignored by IS and fighting for the town has continued.

Analysts estimate that over 400,000 have been killed in Syria since the conflict began in March 2011 when the regime violently crushed protests calling for reforms.

The conflict has evolved into a complex multi-front war that has displaced over half Syria's population.