The Kurdish People's Protection Units (YPG) announced the "liberation" of Kobane yesterday, depriving the Islamic State group (IS) of a strategic prize to add to its territory in Syria and Iraq.
The United States says Kurdish fighters are now in control of about 90 per cent of the town on the Syrian-Turkish border.
"ISIL is now, whether on order or whether they are breaking ranks, is beginning to withdraw from the town," a senior State Department official told reporters.
The US and some 60 coalition partners is engaged in the "first phase of a multi-year campaign," he stressed.
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But a victory in Kobane was an important milestone in trying to change "the narrative" of the militants who have attracted thousands of foreign fighters to their ranks, mostly disaffected youth drawn by the promise of adventure.
IS had poured some of its best foreign fighters into Kobane, the State Department official said, but in the last six weeks the losses had begun to cause splits in the ranks.
Observers say IS lost nearly 1,200 fighters in the battle, of a total of 1,800 killed, despite outgunning YPG forces with sophisticated weaponry captured from Iraqi and Syrian military bases.
"We don't get into body counts, but it's in the four figures in terms of the overall number of ISIL fighters that have been killed," the State Department official confirmed.
Many foreign fighters -- many of them Australians, Belgians, Canadians and Chechens -- were among them, he said, refusing to give exact figures other than to say "it was hugely, hugely significant."
The US began airstrikes on IS to stop its march on Kobane in September and in October airdropped in critical supplies to the anti-IS fighters.
Washington also worked with Turkey to open a land corridor to allow peshmerga fighters to help defend the beleaguered town.
With the eyes of the international media watching the militants "wanted to raise the largest flag they ever made over Kobane," the US official said.
"Kobane shows that you're not going to be part of something great .. So the whole narrative that ISIL is trying to put out, Kobane really puts a dent in it.