Turkey's military fired approximately 500 artillery shells at Islamic State positions in Iraq and Syria, Prime Minister Ahmet Davutoglu said Thursday, claiming some 200 militants were killed in the past two days.

The strikes were in retaliation for a suicide bombing this week in Istanbul which killed 10 German tourists, the premier said.

However, a spokesman for the Kurdish Peshmerga forces at the forefront of the fight against Islamic State in Iraq said there were no Turkish attacks on the extremist group.

The Syrian Observatory for Human Rights, a monitoring group, reported on shelling from Turkey in support of Islamist rebel groups and an ethnic Turkmen militia, in a village in northern Syria, who are defending their positions against an Islamic State advance.

Islamic State's news agency al-Amaq reported 10 shells from Turkey hit a village it controls near Aleppo.

There was no confirmation on deaths from either Islamic State or the monitoring group.

Davutoglu was speaking in the capital Ankara two days after the suicide bombing in the historic Sultanahmet area of Istanbul. Government officials say the bomber crossed into Turkey from Syria, posing as a refugee.

Interior Minister Efkan Ala said seven people have been arrested in connection with the attack. Police have also carried out numerous raids against Islamic State cells in various parts of the country.

Authorities are holding the extremist group responsible for the bombing which took place near the iconic Blue Mosque and Hagia Sophia.

Islamic State, which normally claims its international terrorist attacks, has never taken responsibility for attacks in Turkey. Last year the group's alleged attacks killed more than 140 people in the country.

There is increased security in tourist areas of Istanbul, with the government deciding to boost police presence after the Sultanahmet attack.

Islamic State controls territory in both Iraq and Syria. It holds a 90-kilometres stretch of land along Syria's border with Turkey.

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