Islamic State fighters killed at least 145 civilians in an attack on the Syrian town of Kobani and a nearby village, in what a monitoring group described on Friday as the second worst massacre carried out by the hardline group in Syria.

Fighting between the Kurdish YPG militia and Islamic State fighters who infiltrated the town at the Turkish border on Thursday continued into a second day, the Syrian Observatory for Human Rights monitoring group and a Kurdish official said.

A separate Islamic State assault on government-held areas of the northeastern city of Hasaka was reported to have forced 60,000 people to flee their homes, the United Nations said, warning as many as 200,000 people may eventually try to flee.

Islamic State has a record of conducting large scale killings of civilians in territory it captures in both Iraq and Syria, where it has proclaimed a caliphate to rule over all Muslims according to an ultra-hardline vision of Islam.

The attack on the predominantly Kurdish town of Kobani and the nearby village of Brakh Bootan marked the biggest single massacre of civilians by Islamic State in Syria since it killed hundreds of members of the Sunni Sheitaat tribe last year, Rami Abdulrahman, who runs the Observatory, said.

He said 146 civilians had been killed. Kurdish officials said at least 145 had died.

The assault included at least three suicide car bombs. The dead included the elderly, women and children, he said.

The Islamic State fighters were reported to number in the dozens and entered the town in five cars disguised as members of the YPG and Syrian rebel groups.

In their other assault on Friday, Islamic State fighters clashed with Syrian government forces in the south of Hasaka for a second day and shells hit areas in the center, the Observatory said.

It appeared that Islamic State was also fanning out toward the southeast of the city, which is divided into zones run separately by the Syrian government and a Kurdish administration that oversees the YPG.

The twin attacks which began on Thursday showed the fighters returning to the offensive after two weeks of defeats at the hands of Kurdish-led forces, supported by U.S.-led air strikes. Earlier this week the Kurds advanced to within 50 km (30 miles) of Raqqa city, the de facto capital of Islamic State's self-declared caliphate.

In the latest battles, Islamic State has picked targets where it is difficult for the U.S.-led alliance to provide air support to those fighting on the ground. In Kobani, also known as Ayn al-Arab, aerial bombardment risks civilian casualties in residential areas targeted in the attack.

In Hasaka the Islamic State targets were in areas controlled by President Bashar al-Assad. The U.S.-led coalition, which has been bombing Islamic State targets in both Syria and Iraq since last year, has ruled out cooperating with Damascus.