Updated

Syria's largest oil field was seized from the Islamic State terror group on Sunday by the U.S.-led coalition, dealing another blow to the extremist group after the loss of its de-facto capital last week.

The Kurdish-led Syrian Democratic Forced, with air support from the U.S.-led coalition, said it captured the Al-Omar field in a "swift and wide military operation," adding that some militants have taken cover in oil company houses nearby, where clashes are underway.

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This July 30, 2017 photo, shows an oil field controlled by the Kurdish-led Syrian Democratic Forces, in Rmeilan, Hassakeh province, northeast Syria. (AP Photo/Hussein Malla)

The U.S.-led coalition confirmed the SDF had retaken the oil field, and that Syrian government troops were two files away from the fields, located in the oil-rich Deir el-Zour province along the border with Iraq.

Syrian troops, backed by Russian warplanes and Iranian-sponsored militias, have retaken nearly all of the provincial capital of Deir el-Zour, as well as the town of Mayadeen, which is across the Euphrates River from the Al-Omar field.

The SDF have focused their operations in rural Deir el-Zour on the eastern side of the river, and have already seized a major natural gas field and other smaller oil fields.

Omar Abu Layla, a Europe-based activist from Deir el-Zour who monitors the fighting through contacts there, told the Associated Press that SDF forces have seized control of the oil field but are still clashing with militants in the adjacent housing complex.

The Syrian Observatory for Human Rights said Islamic State fighters who had withdrawn from the oil field mounted a counter-attack overnight against government forces, but a Syrian military source denied the account to Reuters, saying there was no significant attack and fighting raged on at the same pace.

ISIS captured Al-Omar in 2014, when the group swept across large areas in Syria and neighboring Iraq. The field was estimated to produce around 9,000 barrels a day, making it a key source of revenue for the extremists. Its current potential is unknown, following a series of strikes on ISIS-held oil facilities by the U.S.-led coalition.

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Syrian Democratic Forces (SDF) fighters ride atop of military vehicle as they celebrate victory in Raqqa, Syria, October 17, 2017. (REUTERS)

The government lost the al-Omar field to other insurgents in 2013.

It's not clear how Syrian troops will respond to the SDF's seizure of Al-Omar, as Assad has vowed to eventually bring all of Syria back under government control.

The two sides have accused each other of firing on their forces in Deir el-Zour province, but a rare face-to-face meeting of senior U.S. and Russian military officers last month appeared to have calmed tensions.

ISIS has suffered a series of major setbacks in recent months, including the loss of the Syrian city of Raqqa, once the extremists' self-styled capital, and the Iraqi city of Mosul.

Most of the territory the group once held has been seized by an array of Syrian and Iraqi forces.

The Associated Press contributed to this report.