ISTANBUL: Turkey-backed rebels killed 68 Islamic State militants in clashes in northern Syria overnight, Turkish state media reported the military as saying on Saturday, as intense fighting around the town of al-Bab continued.

Syrian rebels supported by Turkish troops have been laying siege to the Islamic State-held town for weeks, as part of the "Euphrates Shield" operation launched by Turkey nearly four months ago to sweep the Sunni hardliners and Kurdish fighters from its Syrian border.

Fighting around al-Bab has escalated this week with Turkish soldiers and 138 jihadists killed in clashes on Wednesday in the deadliest day since the start of Turkey's Syrian incursion.

Sixty-eight Islamic State militants were "neutralised" in fighting near al-Bab since Friday night, state-run Anadolu Agency said, citing a military statement.

A total of 141 Islamic State targets were hit in the fighting and an Islamic State military headquarters was destroyed, Anadolu said.

Two of the rebels were killed and one was wounded, it said.

Defence Minister Fikri Isik said on Friday that the area around a hospital, used as a command centre and ammunition depot by Islamic State, had been cleared of militants, marking a breakthrough for the rebels.

Speaking in Kocaeli province, near Istanbul, Isik also said authorities had information three Turkish soldiers had been captured by Islamic State but nothing else had been confirmed.

Islamic State in Syria released a video on Thursday purporting to show two captured Turkish soldiers being burned to death, according to the US-based SITE Intelligence Group which monitors militant groups online.