DAMASCUS, Syria -- The Syrian army announced on Friday it liberated the long-contested eastern city of Deir el-Zour from the Islamic State group, marking another defeat of the extremists as their self-proclaimed "caliphate" crumbles and almost all their urban strongholds in Syria and Iraq have been lost.

The recapture of Deir el-Zour on the west bank of the Euphrates River is also another victory for President Bashar Assad's forces, though largely symbolic in the Syrian military's bigger fight to capture most of the oil-rich province along the border with Iraq.

Deir el-Zour, which had been divided into a government-held and an IS-held part for nearly three years, is the largest city in eastern Syria and the capital of the province with the same name. It is also the largest to be recaptured by the Syrian government from IS.

Syrian army spokesman Gen. Ali Mayhoub declared victory in Deir el-Zour, describing it as the "last phase" in the military's campaign toward the complete annihilation of IS in Syria.

His statement, read on Syrian state TV, hailed the city's recapture as a strategic win, noting its location on a crossroad linking the country's eastern, northern and central regions, as well as an "oil and gas reservoir" -- a reference to the province.

"With the loss of Deir el-Zour, Daesh loses its ability to lead terrorist operations by its militants who are now isolated and encircled eastern countryside of the city," he said, using the Arabic name for IS.

The extremist group has lost more than 90 per cent of the territory it once held in Iraq and Syria at the height of its power in 2014 and 2015, including Mosul in Iraq and Raqqa in northern Syria. It also comes as Iraqi forces and allied Shiite militiamen are chasing IS remnants inside the town of Qaim, on the Iraqi side of the border.

The militants, routed from one urban stronghold after another, have recently been moving deeper into Syria's remote desert, where experts say they are regrouping and preparing to return to guerrilla-style attacks including scattered hit-and-run and suicide bombings.

In a statement, the Syrian military said it was now in full control of the city, after a weeks-long campaign carried out with allied forces. It said army units were now removing booby traps and mines left behind by the extremist group in the city.

Syrian government forces and their pro-government allies first broke the militant group's siege of their part of the city in September in a Russian-backed offensive, and have been advancing against IS positions since then. The city is the largest in eastern Syria and the capital of the province with the same name.

The Syrian army, backed by Russia and Iran, and Kurdish-led Syrian forces, backed by the United States, are now racing to take the rest of the oil-rich eastern province of Deir el-Zour, including the key town of Boukamal near the Iraqi border.

The Islamic State's last territorial stronghold in Iraq was the town of Qaim, across the border from the Syrian town of Boukamal.

An Iraqi officer in Iraq's western Anbar region said Friday that Iraqi forces have reached the border with Syria as they continue to close in on the pocket of militant-held territory.

The Iraqi forces are now pushing into western neighbourhoods of Qaim, the joint command said and Iraq's Prime Minister Haider al-Abadi pledged the battle will be finished within days.

Qaim, about 320 kilometres (200 miles), west of Baghdad in the Euphrates River Valley and has been used by IS to ferry fighters and supplies between the two countries at the height of the caliphate, when IS held nearly a third of both Iraq and Syria.

A statement posted on the Islamic State's news agency Aamaq on Friday claimed IS fighters have repulsed an attempted attack by the Iraq army south of Qaim, with IS fighters allegedly destroying an armoured military vehicle and two other vehicles mounted with heavy machineguns.

Moscow's military involvement in the Syrian war since 2015 has propped up Assad's forces and turned the conflict in his favour, while Russian mediation earlier this year launched cease-fire talks in Astana, Kazakhstan. The talks, sponsored jointly with Iran and Turkey, have brokered local deals that have significantly reduced violence in the war-torn country.

Footage posted on the website of the Syrian state news agency SANA shows the last moments of the fighting between the Syrian army and IS in Deir el-Zour, including shelling by Syrian tanks and plumes of smoke rising over the city's IS-held and mostly destroyed neighbourhoods of Jamiayat and Jabiliyeh before they were liberated.

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Karam reported from Beirut. Associated Press writers Susannah George in Baghdad and Maamoun Youssef in Cairo contributed to this report.