Rami Abdel Rahman, director of the Syrian Observatory for Human Rights, said "fighters from the Islamic State withdrew overnight from several areas in the east of Ain al-Arab (Kobane) and the southwestern edges."
After the pullback, the group's fighters were present in eastern parts of the strategic town and its southern edges, but were no longer inside on the western front, Abdel Rahman said.
He said the move came after "their rear positions were hit in strikes, causing casualties and damaging at least four of their vehicles."
On Tuesday, fighting raged in the east, west and south of Kobane, which is Syria's third biggest Kurdish town, and a US-led coalition fighting IS carried out multiple air strikes around the town.
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Mustafa Ebdi, a Kurdish journalist and activist from Kobane, wrote on his Facebook page that "the streets of the Maqtala neighbourhood in southeastern Kobane are full of the bodies of Daesh fighters," using the Arabic acronym for IS.
But he added that hundreds of civilians remained in the town and "the humanitarian situation is difficult and people need food and water."
According to the Observatory, at least 412 people have been killed in the fighting, though the group said it believes the true toll could be twice as high.