According to the Syrian Observatory for Human Rights, SDF fighters captured the villages of Kasrat Afnan and Kasab on the southern bank of the Euphrates River.
"They thereby cut the last route IS used to withdraw from Raqa towards territory it controls in the Syrian desert and in Deir Ezzor province," said Observatory head Rami Abdel Rahman.
Backed by US-led air strikes, the SDF spent months chipping away at IS territory around Raqa.
But their progress on Raqa's southern approach had been much slower.
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With today's advance, "the SDF has been able to completely encircle Raqa," Abdel Rahman said.
IS overran Raqa in 2014, transforming it into the de facto Syrian capital of its self-declared "caliphate," which it declared three years ago on June 29.
The city became infamous as the scene of some of the group's worst atrocities, including public beheadings, and is thought to have been a hub for planning attacks overseas.
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