US-backed Syrian fighters pushed further into the Islamic State group stronghold of Manbij on Saturday, seizing a key road junction and grain silos overlooking the city, a monitoring group said.

The city lies close to the border with Turkey and is a key staging post on the jihadists' supply line to areas under its control in eastern Syria and neighbouring Iraq.

The US-backed Kurdish and Arab forces, which have thrust into Manbij after driving across the Euphrates River from the east, have encircled the city and are now closing in with the support of US-led coalition air strikes.

The Syrian Democratic Forces overran the Mills Roundabout in the south of the city on Saturday after capturing nearby grain silos overnight, taking them significantly closer to the city centre, the Syrian Observatory for Human Rights said.

‘The grain silos overlook more than half of Manbij. SDF fighters can climb to the top and monitor the city,’ said Observatory chief Rami Abdel Rahman.

The Raqa Revolutionaries Brigades -- one of the Arab components of the Kurdish-dominated alliance -- confirmed that SDF forces had seized the silos and pushed into the city.

Captured by IS in 2014, Manbij has served as a key transit point for foreign fighters and funds, as well as a trafficking hub for oil, antiquities and other plundered goods.

Its loss would deprive the jihadists of vital revenues and mark the greatest victory so far for the Kurdish-led alliance which has already sealed most of the Turkish border.

Some 200 US and other coalition advisers are supporting the offensive launched at the end of last month.

IS has thrown large numbers of fighters into the battle, losing 463 since May 31, according to the Observatory. The SDF has lost at least 89.