US-backed Syrian rebels have been pushed back from the outskirts of a town held by Islamic State (IS) militants on the border with Iraq and a nearby air base after the jihadists mounted a counter- attack, two rebel sources said.
The New Syria Army rebel group had launched an operation on Tuesday (local time) aimed at capturing the town of Al-Bukamal from IS.
One rebel source said IS fighters had encircled the rebels in a surprise ambush. They had suffered heavy casualties and weapons had been seized by the jihadists, the source said.
"The news is not good. I can say our troops were trapped and suffered many casualties and several fighters were captured and even weapons were taken," he said.
A spokesman of the New Syria Army, Muzahem al Saloum, confirmed the group's fighters had retreated. "We have withdrawn to the outlying desert and the first stage of the campaign has ended," Mr Saloum told media.
Despite the retreat, Mr Saloum said the fighters had at least succeeded in evicting IS from large swathes of desert territory around the town.
IS-affiliated Amaq news agency had earlier said it had killed 40 rebel fighters and captured 15 more in a counter-attack at the Hamadan air base north west of the city.
The operation aiming to capture Al-Bukamal was meant to add to pressure on IS as it faces a separate, US-backed offensive in northern Syria aimed at driving it away from the Turkish border.
The Syrian Observatory for Human Rights said the group's offensive against IS was being mounted with the backing of Western special forces and US-led air strikes.
The capture in 2014 of Al-Bukamal by IS, just a few kilometres from the Iraqi frontier, effectively erased the border between Syria and Iraq. Losing it would be a huge symbolic and strategic blow to the cross-border "caliphate" led by Abu Bakr al-Baghdadi.
The US-led campaign against Islamic State has gone up a gear this month, with an alliance of militias including the Kurdish YPG launching a major offensive against IS in the city of Manbij in northern Syria. In Iraq, the government this week declared victory over IS in Fallujah.
Iraq's military said it had advanced through northern villages held by IS on Wednesday (local time), on its way to an airfield which could serve as the staging ground for a future offensive on Mosul, the biggest city held by the militants.
Army and counter-terrorism forces recaptured Telol al-Baj, about 260km north of Baghdad on the main north-south road on Tuesday (local time), a senior commander participating in the offensive told Reuters.
US-led coalition air strikes have helped repel suicide car bomb attacks, the commander said. Both sides have suffered casualties, but most militants have fled into the desert, he added.
The troops are now around 45km from the airbase at Qayara, less than two weeks after they set out from the refinery town of Baiji, military officials said.
Retaking another refinery near Qayara with a production capacity of 16,000 barrels per day could also hit IS finances.
Army troops advancing separately on the eastern side of the Tigris river from Qayara have made slower progress, taking a handful of villages since setting out from Makhmour more than three months ago.
Iraqi forces shelled Islamic State positions in Haj Ali on Wednesday in preparation for a ground advance that would allow them to reach the river bank, an army source said.
They are expected to link up with the forces from the south near the air base, about 10km west of the river.