AKÇAKALE (AFP) - Kurdish fighters seized control Tuesday of a key border town from the Islamic State in Iraq and Syria (ISIS) militant group, cutting a major supply line in the biggest setback yet for the jihadists in Syria.

From across the frontier in Turkey, the Kurds and allied Syrian rebels could be seen raising their banners in place of the black ISIS flag and taking up positions at the Tal Abyad border post.

Fighters with the Kurdish People's Protection Units (YPG) militia waved their yellow banner as Turkish troops looked on from the other side of the frontier.

The capture of Tal Abyad, used by ISIS as a gateway from Turkey to its de facto capital Raqa city, was "the biggest setback to IS since it announced its caliphate one year ago," said Rami Abdel Rahman, the head of the Syrian Observatory for Human Rights monitoring group, referring to it by its other name, the Islamic State (IS).

The frontier town was a key conduit for foreign fighters and supplies into ISIS-held territory in Syria and for exports of black market oil from jihadist-held fields in eastern Syria, analysts say.

Tal Abyad's fall to the Kurds was "the most significant loss for IS in Syria yet," said Aymenn al-Tamimi, an expert at the Middle East Forum research group.

The Kurdish forces and Syrian rebel allies launched a two-pronged attack on Tal Abyad on June 11, backed by air strikes by the US-led coalition fighting ISIS in Syria and Iraq.

The anti-ISIS forces encircled the town from the southwest and southeast before capturing the border crossing just north of it on Monday.

'An easy win'

The Observatory and Kurdish sources said they had seized full control of the town by early Tuesday.

"IS withdrew without much fight yesterday... It was an easy win," said Mr Ahmed Seyxo, a spokesman for the Democratic Union Party, the political party tied to the YPG.

The fighting had sent thousands of terrified residents fleeing into Turkey, with the United Nations refugee agency saying Tuesday that some 23,000 people had sought refuge across the border between June 3 and 15.

AFP journalists at Akcakale, on the Turkish side of the frontier, said there were no signs of fighting on the Syrian side early on Tuesday, with only two or three families waiting to be allowed into Turkey.

YPG fighters and rebel units were combing through the town to clear mines and booby-trapped cars left behind by ISIS fighters, before allowing civilians to return.

"There are mines and car bombs everywhere, and bodies of IS fighters lying in the streets," said Mr Sherfan Darwish, a spokesman for the Burkan al-Furat rebel group fighting alongside the Kurds.

With the route from Tal Abyad to Raqa cut, ISIS will have to rely on border crossings much further west in neighbouring Aleppo province, adding several hundred kilometres (miles) to their supply lines, Abdel Rahman said.

ISIS still holds the Syrian side of the Jarablus crossing in Aleppo, which is closed on the Turkish side.

Other informal border routes remain open but none to rival Tal Abyad.

Blow to ISIS morale

Analysts said the loss of the town would be a major blow to ISIS morale, just as the group commemorates the first anniversary of the declaration last year of its self-styled Islamic "caliphate".

"This is coming at a time of year when IS is trying to look as powerful as possible," said Mr Charlie Winter, a researcher on jihadism at the London-based Quilliam Foundation.

The Kurdish victory at Tal Abyad, he said, would undermine ISIS's "narrative of constant divine momentum".

While the battle for the Kurdish majority border town of Kobane was in the headlines for months last year, the loss of Tal Abyad was a bigger strategic blow because ISIS had held the town for over a year, Mr Winter said.

Kurdish forces now control around 400 km of contiguous border territory from Kobane in Aleppo province to northeastern Syria, Mr Abdel Rahman said.

Their advance has prompted criticism from Turkish officials, who fear the growing power of Kurdish forces in Syria will embolden Turkey's Kurdish minority.

Turkish officials have accused the YPG of expelling Arab and Turkmen citizens and of seeking to unite the Kurdish-majority areas of Syria.