Beirut: The hardline Islamic State group took control of large parts of a besieged Palestinian refugee camp in southern Damascus on Wednesday, witnesses and a monitoring group said.

The Yarmouk camp, home to up to 18,000 people, has been caught between government forces and Syrian insurgent groups including Islamic State's rivals such as al-Qaeda's Nusra Front.

This picture taken by the UNRWA, shows residents of the besieged Palestinian camp of Yarmouk, queuing to receive food supplies, in Damascus, Syria in January 2014. Credit:AP

"They pushed from the Hajar Aswad area and Nusra fighters have joined them, they have pledged loyalty to Daesh," one witness said, using an Arabic term for Islamic State.

The witness and the British-based Syrian Observatory for Human Rights said clashes continued inside the devastated camp where food, medicine and water are scarce.