"IS launched a large-scale offensive at dawn... and managed to enter Ain Issa," said Redur Khalil, a spokesman for the Kurdish People's Protection Units.
"Clashes are continuing inside the town in the southern part to expel IS," he told AFP.
Ain Issa is some 55 kilometres (35 miles) north of IS's de facto Syrian capital of Raqa city, and fell to Kurdish and Arab forces on June 23, shortly after they took the border town of Tal Abyad from the jihadists.
The Syrian Observatory for Human Rights, meanwhile, said that the IS attack had succeeded and jihadist fighters were in control of Ain Issa and several nearby villages after a wide-ranging assault.
The Britain-based monitor said IS had launched a counter-attack against fronts in both Raqa province and neighbouring Hasakeh.
Kurdish and rebel spokesmen also said IS was engaged in a large-scale attack in the two provinces, but denied that Ain Issa had fallen.
Kurdish fighters backed by Arab allies seized the frontier town of Tal Abyad from IS on June 16, after weeks of fighting during which they captured numerous villages in Raqa province from the jihadists.
The fall of Tal Abyad was a major blow for the group, which had used the town as a conduit for weapons and fighters.
After its capture, the anti-IS forces advanced to Ain Issa, taking both it and a former military base nearby.
But in recent weeks, IS forces have launched several counterattacks against the Kurds, including in Kobane, a small border town that the jihadists battled to capture for some four months.
Kurdish forces backed by US-led air strikes expelled the jihadists from Kobane in January, in a symbolic victory that grabbed international headlines.
They were able to fight off the counterattack there, but IS killed some 200 people inside the town before being pushed out.
AFP
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