Kurdish fighters have besieged Islamic State militants who entered the northern Syrian town of Kobani, activists said, adding that two days of fighting have left more than 100 civilians dead.
Kobani-based Kurdish activist Mustafa Bali said small groups of jihadis are still in the town and have taken civilians hostage in at least three locations.
He added that a fourth location, a restaurant, was stormed by Kurdish fighters who freed the hostages and killed several IS fighters.
The attack on Kobani came after IS suffered setbacks over the past two weeks, including the loss of the Syrian border town of Tal Abyad - one of the main points for the jihadis to bring in foreign fighters.
Kobani, on Syria's border with Turkey, had become a proud symbol of Kurdish resistance after the town and its defenders, backed by US-led coalition air strikes repelled an extended IS assault.
The town was besieged by IS for months earlier this year, but the militants were driven out by Kurdish militiamen six months ago.
According to Kurdish officials, the IS militants infiltrated the town yesterday by wearing Syrian rebel uniforms and carrying flags of the mainstream Free Syrian Army to deceive Kobani's Kurdish defenders. They then launched their attack by setting off three car bombs and taking up positions inside Kobani, the officials said.
"Fighting is still ongoing in the city. It was quiet overnight but fighting resumed Friday morning," said Mr Bali. He added that IS fighters were holding hostages in a house near the Mashta Nour hospital, a house near the town's cultural centre and a home close to the Mahdathe school.
The Britain-based Syrian Observatory for Human Rights said that the attack on Kobani and its suburbs left 120 civilians dead. Mr Bali said more than 100 civilians were killed in Kobani as well as 40 IS fighters whose bodies are still lying in the streets.
He added that 54 civilians have been buried in Kobani since yesterday.
A Facebook page that posts IS statements said a group of "inghimasiyoun", a term that the group uses to refer to infiltrators who enter areas behind enemy lines, entered Kobani and are fighting street battles inside the town.
Mr Bali said some IS snipers took up positions on the roofs of buildings and opened fire on people in the streets.
After the clashes in Kobani broke out, the main Kurdish militia, the People's Protection Units, or YPG, closed the primary border crossing point between Turkey and Tal Abyad for security reasons, said YPG spokesman Redur Khalil.