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The SDF was conducting clearance operations after seizing Tabqa and the nearby dam on Wednesday, said the Syrian Observatory for Human Rights.
"The SDF were able to deploy onto the dam itself during the night," the Observatory's Rami Abdel Rahman said. "But civilians are still unable to enter some parts of Tabqa because of explosives" left by IS.
The US military command in the Middle East, Centcom, confirmed the "liberation" of Tabqa.
"The SDF's increased pressure on ISIS from each flank allowed it to... clear the final neighbourhoods of the city and isolate Tabqa dam," said Centcom, referring to IS.
The Arab-Kurdish alliance accepted IS's surrender to protect civilians and the dam, it said, adding "the coalition tracked fleeing fighters and targeted those that could be safely hit".
Situated on the Euphrates River about 55 kilometres (35 miles) upstream from Raqa, Tabqa is a key waypost in the operation to capture the jihadists' de facto Syrian capital.
Operation Wrath of the Euphrates has seen the SDF capture large swathes of territory north of Raqa and at their closest point its fighters are just eight kilometres (five miles) from the city.
It is now working to tighten the noose before a final assault.
- Celebrations in Tabqa -
The battle for Tabqa was marked by fears that fighting could damage the nearby dam -- Syria's largest -- with the potential for catastrophic flooding.
Technicians fled the dam as fighting intensified in recent days, a source who works closely with them told AFP.
A repair team was on standby on Thursday, awaiting permission from the SDF, which was still clearing mines, to enter and assess any damage to the structure.
An AFP correspondent saw SDF fighters distributing sweets to their comrades as they celebrated at the dam overlooking Lake Assad, a large reservoir created by the facility in the 1970s.
The SDF is dominated by the Kurdish People's Protection Units (YPG), seen by the US as an indispensable ally in the fight against IS but considered a "terrorist group" by Turkey.
YPG video footage on Thursday showed half a dozen fighters and youths dancing in Tabqa, and children calling out excitedly: "The dam has been liberated".
Washington has stepped up its support for the YPG in recent days, announcing it would arm the Kurdish fighters in a break with its previous policy of arming only the SDF's Arab fighters.
The move has infuriated NATO ally Ankara.
The US-led coalition said a first consignment of weapons was already in place for delivery and could be dispatched to the Kurds "very quickly".
The arms include heavy machineguns to be used against IS truck bombs, mortars, small arms and ammunition, as well as armoured vehicles and equipment to detect landmines, said coalition spokesman Colonel John Dorrian.
"Every single one of these weapons that are being provided to our partner force, we intend to account for them, and to ensure that they are pointed at ISIS," he added.
- Turkey slams US 'mistake' -
But Washington's reassurances failed to assuage Ankara, which regards the YPG as the Syrian arm of the Kurdistan Workers' Party (PKK), which has waged a deadly insurgency inside Turkey since 1984.
"YPG and PKK are both terror groups, there is no difference at all between them. They only have different names," said Turkish Foreign Minister Mevlut Cavusoglu.
On Thursday, Pentagon chief Jim Mattis met with Turkish Prime Minister Binali Yildirim in London, although it was not immediately clear if they discussed the arming of the YPG.
The issue is set to dominate talks between Turkish President Recep Tayyip Erdogan and his American counterpart Donald Trump next week, the first meeting between the two heads of state.
"I hope very much that this mistake will be reversed immediately," Erdogan said.
Meanwhile, Syria's President Bashar al-Assad described five rounds of peace talks held in Geneva so far as a "media event" whose aim was to get concessions out of his government, according to official media.
In fighting elsewhere on Thursday, government forces gained ground in the capital's Qabun district, as the regime presses efforts to push insurgents into an evacuation deal and to clear Damascus of armed groups, the Observatory said.
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"The SDF were able to deploy onto the dam itself during the night," the Observatory's Rami Abdel Rahman said. "But civilians are still unable to enter some parts of Tabqa because of explosives" left by IS.
The US military command in the Middle East, Centcom, confirmed the "liberation" of Tabqa.
"The SDF's increased pressure on ISIS from each flank allowed it to... clear the final neighbourhoods of the city and isolate Tabqa dam," said Centcom, referring to IS.
The Arab-Kurdish alliance accepted IS's surrender to protect civilians and the dam, it said, adding "the coalition tracked fleeing fighters and targeted those that could be safely hit".
Situated on the Euphrates River about 55 kilometres (35 miles) upstream from Raqa, Tabqa is a key waypost in the operation to capture the jihadists' de facto Syrian capital.
Operation Wrath of the Euphrates has seen the SDF capture large swathes of territory north of Raqa and at their closest point its fighters are just eight kilometres (five miles) from the city.
It is now working to tighten the noose before a final assault.
- Celebrations in Tabqa -
The battle for Tabqa was marked by fears that fighting could damage the nearby dam -- Syria's largest -- with the potential for catastrophic flooding.
Technicians fled the dam as fighting intensified in recent days, a source who works closely with them told AFP.
A repair team was on standby on Thursday, awaiting permission from the SDF, which was still clearing mines, to enter and assess any damage to the structure.
An AFP correspondent saw SDF fighters distributing sweets to their comrades as they celebrated at the dam overlooking Lake Assad, a large reservoir created by the facility in the 1970s.
The SDF is dominated by the Kurdish People's Protection Units (YPG), seen by the US as an indispensable ally in the fight against IS but considered a "terrorist group" by Turkey.
YPG video footage on Thursday showed half a dozen fighters and youths dancing in Tabqa, and children calling out excitedly: "The dam has been liberated".
Washington has stepped up its support for the YPG in recent days, announcing it would arm the Kurdish fighters in a break with its previous policy of arming only the SDF's Arab fighters.
The move has infuriated NATO ally Ankara.
The US-led coalition said a first consignment of weapons was already in place for delivery and could be dispatched to the Kurds "very quickly".
The arms include heavy machineguns to be used against IS truck bombs, mortars, small arms and ammunition, as well as armoured vehicles and equipment to detect landmines, said coalition spokesman Colonel John Dorrian.
"Every single one of these weapons that are being provided to our partner force, we intend to account for them, and to ensure that they are pointed at ISIS," he added.
- Turkey slams US 'mistake' -
But Washington's reassurances failed to assuage Ankara, which regards the YPG as the Syrian arm of the Kurdistan Workers' Party (PKK), which has waged a deadly insurgency inside Turkey since 1984.
"YPG and PKK are both terror groups, there is no difference at all between them. They only have different names," said Turkish Foreign Minister Mevlut Cavusoglu.
On Thursday, Pentagon chief Jim Mattis met with Turkish Prime Minister Binali Yildirim in London, although it was not immediately clear if they discussed the arming of the YPG.
The issue is set to dominate talks between Turkish President Recep Tayyip Erdogan and his American counterpart Donald Trump next week, the first meeting between the two heads of state.
"I hope very much that this mistake will be reversed immediately," Erdogan said.
Meanwhile, Syria's President Bashar al-Assad described five rounds of peace talks held in Geneva so far as a "media event" whose aim was to get concessions out of his government, according to official media.
In fighting elsewhere on Thursday, government forces gained ground in the capital's Qabun district, as the regime presses efforts to push insurgents into an evacuation deal and to clear Damascus of armed groups, the Observatory said.
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