US-backed forces fighting Islamic State near the Syrian-Turkish border have cut off all routes in and out of the terror group's stronghold in the area - the city of Manbij - a monitoring group has said.

The Syria Democratic Forces (SDF), supported by American-led air strikes and US Special Forces, have surrounded and seized control of the final road into the Syrian city - severing the main route into Turkey as well.

This includes the road south out of Manbij heading to Islamic State's de facto capital of Raqqa - and a road north out of the city to the IS-held border town of Jarabulus, which the jihadists have been using as a transit point for fighters, money and weapons.

The Syrian Observatory for Human Rights said the SDF - which includes Syrian Kurdish and Arab fighters - took control of the final route on Friday.

"There's no road left... they're all cut," said Rami Abdulrahman, director of the UK-based group.

IS still controls territory along the Turkish border but the roads in the area are more dangerous and difficult to access, he said.

"For the jihadists to reach the Turkish border from Raqqa, they now have to take a route that is more dangerous because of regime troops nearby and Russian air strikes," he said.

The offensive, aimed at flushing the extremist group out of territory it controls along the key border, began last week.

Around 160 IS fighters and some 20 SDF troops have died in battles around Manbij, according to the monitoring group.

Manbij, which had a pre-war population of 100,000, is one of the largest IS urban strongholds in northern Aleppo province.