A car bombing blamed on the Islamic State group killed at least 26 displaced people in eastern Syria on Friday, the Syrian Observatory for Human Rights monitor said.

The Britain-based Observatory said 12 children were among the victims of the attack on a gathering at a checkpoint run by US-backed fighters in Deir Ezzor province.

The jihadists are losing ground there to two separate offensives that have come close to ousting IS from Syria.

"Dozens of people were wounded, and the death toll could rise because of the number of serious injuries," said Observatory director Rami Abdel Rahman.

The displaced people had been on their way to neighbouring Hasakeh province, where camps have been set up to house them in Kurdish-controlled territory, Abdel Rahman said.

Syria's state news agency SANA also reported an IS car bombing targeting "a gathering of displaced families from Deir Ezzor", giving a toll of 20 dead and 30 wounded.

IS controls roughly one quarter of oil-rich Deir Ezzor province but is battling for survival on two fronts.

One offensive is by Syrian regime forces backed by Russian air power, while the second is by a US-backed Kurdish and Arab coalition, the Syrian Democratic Forces.

The jihadist group appears to be seeking to prove it still has the capacity to carry out major attacks despite losing much of its cross-border "caliphate" to multiple assaults in Iraq and Syria.

In early November, an IS car bombing killed at least 75 displaced civilians who had fled fighting in Deir Ezzor, the Observatory reported.

IS fighters are now cornered in part of Deir Ezzor province around the border town of Albu Kamal on the frontier with Iraq.

Many civilians have tried to flee the affected areas.

The jihadist group seized large areas of both Syria and Iraq in a lightning 2014 campaign, but this year has lost much of the territory it once held.

Government forces fighting to flush the group from Syrian territory on Thursday entered Albu Kamal, the last town in the country held by the Islamic State group, the Observatory said.

Losing the town completely would cap the group's reversion to an underground guerrilla organisation with no urban base.

The Iraqi army on Friday retook the last IS-held town in the country, the small Euphrates valley town of Rawa, near the Syrian border.

Source: AFP