BEIRUT (Reuters) - Al Qaeda offshoot the Islamic State expelled rival rebels from the eastern Syrian city of Deir al-Zor on Monday, tightening its grip on the oil-producing province abutting territory it also controls in Iraq, activists said.

The Islamic State's hardline Sunni fighters have been advancing against rivals in Deir al-Zor province with the help of weapons it seized in a lightning offensive against Iraqi government forces across the border last month.

The fighting has centered largely around control of oilfields and towns along the Euphrates River and has killed hundreds of fighters since the start of the year.

On Monday, the Islamic State expelled dozens of rival rebels from Deir al-Zor city, including al Qaeda's Syria branch, the Nusra Front, and Ahrar al-Sham, a hardline Islamist group, the Britain-based Syrian Observatory for Human Rights said.

"The Islamic State is now in control of the entire Deir al-Zor province apart from a few areas and the military airport that the government is in control of," Observatory director Rami Abdurrahman said.

Fighters from rival Islamist groups had either fled or pledged allegiance to the Islamic State, he said, adding that government forces loyal to Syrian President Bashar al-Assad still controlled about half of Deir al-Zor city.

The Islamic State also killed a local Nusra Front leader, Abdurrahman added. Supporters of the Islamic State, which shortened its name from the Islamic State in Iraq and the Levant (ISIL) last month, posted what it said were pictures of the Nusra leader's body online, but they could not be verified.

Omar Abu Leila, a spokesman for the rebel Free Syrian Army in the east, said hundreds of fighters had fled to the Deraa area in the south near Jordan and the Qalamoun region near Lebanon since the Islamic State declared a "caliphate" in the area it controls spanning eastern Syria and northern Iraq.

He said the influx of weapons from Iraq had tipped the balance in the Islamic State's favour and helped them secure control of local oilfields. "We have had no help from outside," Abu Leila said.

(Reporting by Alexander Dziadosz and Tom Perry in Beirut and Dasha Afanasieva in Istanbul; Writing by Alexander Dziadosz; Editing by Mark Heinrich)