The Syrian Observatory for Human Rights said the merger is significant because it opens the way for ISIL to take control of both sides of the border at Albu Kamal in Syria and Al-Qaim in Iraq, where the jihadist group has led a major offencive this month.
After months of clashes between the two sides, Al-Qaeda's official Syrian arm the Al-Nusra Front "pledged loyalty to ISIL" in Albu Kamal, said Observatory director Rami Abdel Rahman.
An ISIL jihadist confirmed the reports on Twitter, and posted a photograph showing an Egyptian Al-Nusra Front commander shaking hands with a ISIL leader of Chechen origin.
Although both ISIL and the Al-Nusra Front are rooted in Al-Qaeda, the two have been rivals for much of the time that ISIL has been involved in Syria's civil war since spring last year.
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"They are rivals, but both groups are jihadist and extremists. This move will create tension now with other rebel groups, including Islamists, in the area," said Abdel Rahman.
Using a pseudonym for security reasons, Hadi Salameh also said the merger "will cause a big problem with the local tribes, who will not welcome this change."
Another activist said the merger comes days after local rebel brigades who had been working with Al-Nusra Front signed a declaration excluding the official Al-Qaeda branch from the Islamic court, which acts as the de facto power in many rebel areas of Syria.
"The loyalty oath (to ISIL) comes after tension between Al-Nusra and the local rebels," said the activist, Abdel Salam al-Hussein.
President Bashar al-Assad's regime has rarely targeted ISIL bastions, except in recent days after the group and other Sunni militants launched an offencive in Iraq, wresting control of Mosul and other pars of Iraq.
ISIL aspires to create an Islamic state that straddles Iraq and Syria.