The battle between Al-Qaeda affiliate Al-Nusra Front and the breakaway Islamic State of Iraq and the Levant (ISIL) has raged for four days despite an order from Al-Qaeda chief Ayman al-Zawahiri to stop fighting.
"Residents of the towns of Busayra, home to 35,000 people, Abriha, home to 12,000 people, and Al-Zir, home to 15,000 people, have nearly all been displaced by the fighting in the area," said the Britain-based monitoring group.
At least 62 fighters have been killed in this week's clashes, said the Observatory.
The latest showdown between Al-Nusra and ISIL erupted on Wednesday in energy-rich Deir Ezzor, bordering Iraq.
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"There are battles now in an area around 10 kilometres from Busayra that has an oil rig and a gas plant," said Observatory director Rami Abdel Rahman.
The group said hundreds of the displaced had reached Turkey but the vast majority sought refuge in other rebel-held areas of Deir Ezzor province.
Al-Nusra Front is seen by many rebels as an ally, but ISIL has been widely rejected by the armed opposition to President Bashar al-Assad's regime because of its quest for hegemony and abuses.
Mainstream rebel fighters launched a massive offensive against ISIL in January and Al-Nusra Front joined the battle later.