Tabqa sits on the Euphrates River and on a strategic supply route about 55 kilometres (35 miles) west of Raqa, the Syrian heart of IS's so-called caliphate.
In their drive for Raqa, the US-backed Syrian Democratic Forces have captured more than 90 percent of Tabqa, but have not been able to fully clear the militants out of the city or the adjacent dam.
"The SDF hasn't been able to seize complete control of Tabqa because IS fighters are still present in the neighbourhoods of Wahdah and Hurriyah," said Rami Abdel Rahman, who heads the Syrian Observatory for Human Rights.
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The two districts are in the city's north near Tabqa Dam, Syria's largest.
Abdel Rahman said "dozens" of IS fighters were laying mines and engaging in small-scale skirmishes with the SDF, but had not deployed suicide bombers in recent days.
An SDF commander inside Tabqa told AFP on Sunday that his forces were locked in "violent clashes" in the northern part of the city.
"The operation is going slowly because of the presence of civilians being used as human shields by IS," the commander said, saying his forces were trying to advance "carefully and accurately".
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"Soon we will be able to announce the city fully cleared of Daesh," he added, using the Arabic acronym for IS.
The SDF first entered Tabqa on April 24, but IS has put up fierce resistance including using snipers and weaponised drones, a tactic it perfected in neighbouring Iraq.
Overnight, IS's propaganda arm Amaq said terrorists had clashed with SDF forces inside the city.
The assault on Raqa, dubbed "Wrath of the Euphrates", was launched in November and has seen the SDF capture large swathes of countryside around the city.
More than 320,000 people have been killed in Syria since the country's war began with anti-government protests in March 2011.
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