Violence around Kobane, Kurdish town on the Syrian-Turkish border came after IS released a new video showing a masked militant beheading a British aid worker, Alan Henning, and threatening to kill a fellow aid worker from America, Peter Kassig.
The footage, almost identical to three previous execution films released by the group, triggered revulsion around the world and prompted Britain's prime minister to pledge the killer would be found.
IS began its advance towards Kobane, also known as Ain al-Arab, on September 16 to cement its grip over a long stretch of the border. It has prompting a mass exodus of residents from the town and the surrounding countryside, with some 186,000 fleeing into Turkey.
On Saturday, fierce clashes were continuing as IS militants battled to seize Kobane, said activists and a monitoring group that also reported the latest US-led air strikes launched on Friday night.
The Syrian Observatory for Human Rights group said the strikes targeted at least four sites on the south and southeastern fronts on the outskirts of Kobane, destroying some military materiel.
An AFP team on the Turkish side of the border near Kobane said that the fighting was visible on Saturday morning, with mortar shells pounding into the town and smoke rising above it.
On Friday, IS militants fired at least 80 shells into the town, but activist Mustafa Ebdi said Kurdish fighters had been buoyed by their success at holding off an incursion into Kobane so far.
"Daesh fighters were saying they would be praying Eid prayers in Kobane," he said, using the Arabic acronym for IS and referring to the Muslim Eid al-Adha festival being marked on Saturday.
"But so far they have failed to enter the town."
On Friday night, IS released a video showing the execution of Henning, a 47-year-old volunteer driver who went to Syria with a Muslim charity.
The footage opened with a news report about the British parliament's vote last week to authorise air strikes against jihadist targets in Iraq.
Then it cut to Henning, on his knees against a desert backdrop and wearing an orange prison-style outfit, with a masked militant standing over him wielding a combat knife.
The jihadist, who has the same British accent as the killer in previous IS execution videos, directly addressed British Prime Minister David Cameron.
"The blood of David Haines was on your hands, Cameron," he said, referring to another British aid worker killed by the group.
"Alan Henning will also be slaughtered, but his blood is on the hands of the British parliament," he declared.
Kassig, a former US army soldier and Iraq veteran in his 20s who returned to the Middle East to found an aid agency, is then shown alive and threatened by the knife-wielding militant.
The jihadists have previously released videos showing the murders of Haines and American journalists James Foley and Steven Sotloff.
The latest execution was condemned worldwide, with Britain's Cameron saying it "shows just how barbaric and repulsive these terrorists are."
"We will do all we can to hunt down these murderers and bring them to justice," he said.
US President Barack Obama condemned the "brutal murder" and warned the US-led coalition "will continue taking decisive action to degrade and ultimately destroy" IS.
Washington is leading a coalition of nations against the IS group, which has declared an Islamic "caliphate" in parts of Syria and Iraq.
On Thursday, Turkey's parliament voted to allow the deployment of Turkish forces in Syria and Iraq to fight the Islamic State, and the country's prime minister has pledged to "do whatever we can" to prevent Kobane falling to IS militants.
On Saturday, Ankara also warned it would not hesitate to strike IS jihadists if they attacked Turkish troops stationed at an enclave holding the tomb of Suleyman Shah.
The small patch of land is considered Turkish territory and several dozen Turkish troops are stationed there.
"If one so much as touches a hair on the their heads, Turkey with its army will do all that is necessary and everything will change from that moment on," President Recep Tayyip Erdogan warned.