A US-backed alliance of Syrian Kurdish and Arab forces Saturday captured a strategic dam from Islamic State in northern Syria and cut off a supply route for the terrorist militia, a monitoring group said. 

The Syrian Observatory for Human Rights said the Democratic Forces of Syria (DFS) were engaged in fierce fighting against the hardline jihadists after seizing Tishreen Dam, located about 22 kilometres from al-Raqqa, Islamic State's de-facto capital in Syria.

It is one of three major dams on the Euphrates River that flows from Turkey through Syria and into Iraq, and supplies much of northern Syria with electricity.

DFS, a coalition comprising mainly local Kurds, Arabs and Assyrians, also seized the western bank of the Euphrates hours after controlling the eastern side of the river close to Tishreen Dam on the north-eastern outskirts of Aleppo province.

The Britain-based Observatory said US-led coalition warplanes were mounting strikes against Islamic State positions in the area.

The breakthrough resulted in cutting off a short road used by Islamic State between its strongholds in al-Raqqa in north-eastern Syria and Aleppo.

Syrian rebels first captured Tishreen Dam from government troops in December 2012. The dam has been under Islamic State's control since 2014.

According to Jane's Intelligence Review, Islamic State's control of key energy assets in Syria gives it considerable strategic leverage over the regime of Syrian President Bashar al-Assad.

The al-Qaeda splinter group rules vast territory in Syria and neighbouring Iraq.

Meanwhile, last-minute snags led to a "freeze" of what would have been an unprecedented deal between Islamic State and al-Assad's government, the Observatory said earlier in the day. 

Under the UN-sponsored deal, hundreds of militants from Islamic State and other rebel groups were to be evacuated from the suburbs of the Syrian capital, Damascus.

The Observatory said the agreement was "frozen due to logistical issues."

Some 3,620 people were to be given safe passage out of Damascus' southern districts of al-Hajar al-Aswad and al-Qadam, besieged by al-Assad's forces.

The would-be evacuees include civilians, but also 2,090 fighters from Islamic State and al-Qaeda's Syria branch, al-Nusra Front.

"The agreement was frozen, but not cancelled, due to logistical issues such as ability of Islamic State to secure buses from its end, which were to transport evacuees from the south of Damascus to al-Raqqa," the Observatory said in a statement.      

The monitoring group said that a dispute between members of al-Nusra Front and other Islamist rebels about where they should go from Damascus was another obstacle.

They differed on whether they would head to rebel-held areas in the north-western province of Idlib or Aleppo.

No new date has been set for implementing the deal.

Islamic State in al-Qadam and al-Hajar al-Aswad used both districts to launch attacks into the neighbouring Yarmouk Palestinian refugee camp.

Fighters from the radical group first attacked the Yarmouk camp in April when they clashed with al-Nusra there for control of the sprawling site.

The camp has also seen clashes among rival rebel groups as well as between militants and al-Assad's forces for the last three years.

Several "local ceasefires" between other rebel groups and the Syrian government have secured safe passage for fighters in recent months in the country.

Latest news

Syrian opposition rules out future role for President al-Assad

The Syrian opposition said Friday it would not accept any role for President Bashar al-Assad in the future of the war-torn country, reacting to a recent US shift saying that removing al-Assad is no longer a priority for Washington.

Russian Army integrates breakaway forces of Georgian province

Parts of the small fighting forces of the Georgian breakaway province of South Ossetia have been placed under Russian military control, Russian Defence Minister Sergei Shoigu said on Friday.

Czech Republic's Pilsner Urquell beer is now Japanese

Japanese brewing company Asahi completed its takeover of the Czech brewery Pilsner Urquell on Friday, Asahi said in a statement.

Judge approves 25-million-dollar settlement of Trump University case

A US district judge on Friday approved a 25-million-dollar settlement of lawsuits and state fraud allegations against Trump University, the US president's now-defunct business venture.

Former Thai premier Thaksin to junta on reconciliation: 'Cut me out'

Former Thai prime minister Thaksin Shinawatra on Friday announced that he is not interested in the junta-led reconciliation process, three days after the junta handed him a half-a-billion-dollar tax bill for his past business deal.

Dalic: We welcome possible deal between Agrokor and banks

The government welcomes the possibility of an agreement being concluded between the Agrokor food company and creditor banks, and the bill on vitally important companies is not a fallback plan but the result of the government's care for the overall economic and financial stability of Croatia, Deputy Prime Minister and Minister of Economy Martina Dalic told a press conference in Zagreb on Friday.

Croatia, China sign action plan for cooperation in agriculture

The Croatian and Chinese ministries of agriculture on Friday signed an action plan for cooperation in the field of agriculture for the period 2017-2018, the Croatian ministry said in a statement.

ZSE indices up, Agrokor shares in focus of investor interest

The Zagreb Stock Exchange (ZSE) indices on Friday rose by more than 1.8%, with stocks of the Agrokor food and retail concern being in the focus of investor interest again.

Berlin police defend handling of Berlin market attacker

Berlin police defended themselves on Friday against accusations that they stopped surveillance on Berlin Christmas market attacker despite knowing in June 2016 he was dangerous.

Croatia, creditors tailor emergency measures to save tottering giant

Croatia's tottering retail and food giant Agrokor reached an agreement with its creditors, putting its debts standby and allowing it to continue working during emergency restructuring, the Croatian branch of Austria's Erste Bank said Friday.

Agrokor's creditors say standstill agreement to go into force today

A standstill agreement regarding the Agrokor concern's existing financial obligations to banks will take effect on Friday, additional capital will be injected into the concern in the coming days and the concern will be actively restructured, which includes a change of its management, it was said on Friday after a meeting between Agrokor's suppliers and creditor banks.

Palestinians, UN slam Israel's new settlement plan

Palestinians, Israeli activists and the UN lambasted the government of Israeli Prime Minister Benjamin Netanyahu on Friday, a day after it gave the go-ahead for the first new West Bank settlement in a quarter of a century.

South Sudan rebels release three abducted foreign oil workers

South Sudanese rebels have released three foreign engineers they abducted in early March in the oil-rich Upper Nile region, Foreign Affairs Ministry official Mawein Makol Arik said on Friday.

Turkish opposition: Imprisoned party chief has gone on hunger strike

The head of Turkey's pro-Kurdish opposition party has launched a hunger strike from prison.

European leagues threaten Champions League schedule clashes

The European Professional Football Leagues (EPFL) on Friday threatened schedule clashes on Champions League matchdays in an ongoing dispute with the governing body UEFA.

Danish court revokes citizenship of IS volunteer

A Danish appellate court on Friday stripped a man of his Danish citizenship for volunteering to fight for the extremist Islamic State in Syria.

Banks and Agrokor agree on key elements of standstill agreement

Member banks of the coordinating committee of financial creditors and representatives of the Agrokor food company have in principle agreed on key elements of a standstill agreement, which is expected to be signed later today, announcing changes in the company's management team, Erste Bank said in a statement on Friday afternoon.

Syrian man on trial in Sweden; mosque attack labelled terrorism

A Syrian man went on trial Friday in the southern Swedish city of Malmo, charged with terrorism and arson after an attack last year on a building used as an assembly hall by Shiite Muslims.