The Islamic State group killed 164 civilians in its offensive on the Kurdish town of Kobane, in what a monitor Friday called one of the jihadists' "worst massacres" in Syria.

The killing spree, which took place mostly inside Kobane itself, was widely seen as vengeance for a series of defeats inflicted on the jihadists by Kurdish militia in recent weeks.

At least 120 civilians were killed in a 24-hour rampage on Kobane, and another 26 were executed in a nearby village, the Syrian Observatory for Human Rights said.

The bullet-riddled bodies of 18 people -- including children -- were found on Friday morning in the streets of Kobane, the Britain-based Observatory said, adding that they had been shot "at close range".

"The body of one child bore the impact of five bullets," it said.

The assault -- in which 42 IS fighters and 10 Kurds also died -- began on Thursday when three IS suicide bombers blew up vehicles at the entrances to Kobane, a symbol of Kurdish resistance.

Women were also among civilians whose bodies were found in their homes and on the streets, the Observatory said.

"According to medical sources and Kobane residents, 120 civilians were executed by IS in their homes or killed by the group's rockets or snipers," Observatory director Rami Abdel Rahman told AFP.

"When they entered the town, the jihadists took up positions in buildings at the southeast and southwest entrances, firing at everything that moved."

Local journalist Mostafa Ali said there was no military dimension to the assault.

"IS doesn't want to take over the town. They just came to kill the highest number of civilians in the ugliest ways possible," he told AFP.

"Every family in Kobane lost a family member on Thursday," Kurdish activist Arin Shekhmos said.

The jihadists entered Kobane at dawn on Thursday disguised as Kurdish People's Protection Units (YPG) fighters, said Ali.

They took up positions in buildings in the south of the town, using civilians as "human shields".

"There are at least 70 civilians in these various neighbourhoods that have been taken hostage by IS," Ali added.

"The YPG has sent reinforcements and have encircled the buildings, but the situation is difficult. The YPG doesn't want to hurt the women and children there."

More than 1,000 fleeing civilians waited on the Syrian side of the frontier with Turkey on Friday, carefully watched by Turkish troops and police on the other side.

Relatives who had made it across the border cried in despair, an AFP photographer reported.

Kobane was the scene of one of IS's most dramatic defeats in January when Kurdish militia backed by US-led air strikes ousted the jihadists after four months of heavy fighting.

Kurdish fighters have gone on to seize Tal Abyad, another border town farther east, in a heavy blow to the jihadists' supply lines.

IS has hit back against Kurdish victories with an offensive against Hasakeh in the northeast, capital of the mainly Kurdish province of the same name.

Abdel Rahman said IS had seized two neighbourhoods in the city's south as government forces, who jointly controlled the city with Kurdish militia, carried out air strikes.

At least 20 jihadists and 30 pro-government fighters were killed when IS captured southern parts of Hasakeh.

An IS suicide bomber also killed at least 20 regime troops on Friday, when a booby-trapped car targeted the criminal security headquarters in the south of the city, the Observatory said.

On Thursday, the UN Office for the Coordination of Humanitarian Affairs (OCHA) said the Hasakeh clashes had displaced an estimated 60,000 people, including 10,000 who fled north towards Amuda.

Shekhmos said civilians from southern neighbourhoods had fled to Kurdish-controlled parts of the city, but that the YPG was not yet involved in the fighting.

The jihadists previously advanced to the southern edge of Hasakeh in May but were pushed back by government forces.

In southern Syria, a rebel alliance pressed an assault on the city and provincial capital of Daraa which it began on Thursday, with some 40 people reported killed.

President Bashar al-Assad's regime has already lost two provincial capitals in the four-year-old civil war: IS-held Raqa in the Euphrates valley and Idlib in the northwest, which is held by a rebel alliance including Al-Qaeda.

At least 230,000 people have been killed since Syria's conflict erupted in 2011.