BEIRUT (Reuters) - The Syrian Observatory for Human Rights said an Islamic State attack on Thursday cut off the main road between Deir al-Zor city and Palmyra, but a Syrian military source denied this.

The Observatory, a Britain-based war monitor, said Islamic State seized the town of al-Shoula on the road, as Syrian troops and their allies battled around it with heavy air cover.

But the Syrian military source said the army thwarted the attack and denied that Islamic State fighters had taken the town and cut off the route. The militants tried to mount an attack from territory they control southeast of Deir al-Zor city, near the border with Iraq, the source added.

“They received a blow and did not succeed,” the source said. The road, which the army and its allies seized in recent weeks, serves as a major supply route from government territory into the eastern city.

With Russian air power and Iran-backed militias, the Syrian army reached Deir al-Zor city last month, breaking an Islamic State siege of an enclave there that had lasted three years.

The towns along the Euphrates river, downstream of the city, have fast become the last major IS footholds in Syria and a focus of the multi-sided war.

Islamic State militants have been on the back foot in both Iraq and Syria, where they have lost vast territory to different enemies this year.

With U.S.-led jets and special forces, an alliance of Kurdish and Arab militias is also battling Islamic State on the river’s eastern bank. The separate offensives have both advanced as they race to capture swathes of Deir al-Zor province.

IS media unit Amaq said on Thursday that the militants took al-Shoula and a nearby village as they waged an attack that included suicide bombers, capturing two Russian forces.

The Russian defense ministry denied any military personnel were taken hostage, RIA news agency said citing a Russian military official at the Hmeimim air base in Syria.

“There were no incidents with capturing or losing Russian servicemen in Deir Al-Zor province and other Syrian provinces,” the official said.

Islamic State leader Abu Bakr Al-Baghdadi exhorted his followers on Thursday to stand fast and keep fighting, in his first purported audio communication in almost a year.