The clashes in the Kayapinar district of the mainly Kurdish city of Diyarbakir were on-going, the sources said.
Turkish authorities have extended operations into suspected IS cells after a double suicide bombing in Ankara that killed more than 100 people - the worst attack of its kind in Turkey's modern history - was blamed on the militant group.
Last week, President Tayyip Erdogan said Syrian intelligence and Kurdish militants, not just IS, were behind the attack that targeted a rally of pro-Kurdish activists and civic groups.
Erdogan said Kurdistan Workers Party (PKK) militants, the Syrian "mukhabarat" secret police and the Syrian Kurdish PYD militia had worked together with IS in the bombing on Oct. 10.
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