The fighting centred on the town of Marea, a key rebel bastion that IS has been trying to capture for months.
The Observatory said fighting was ongoing around the town, which rebel forces still control, as well in villages in the surrounding area.
Marea is one of the most significant rebel-held towns in northern Aleppo and lies on a key supply route running to the Turkish border.
IS has targeted the town for months, seeking to expand westwards from territory it already holds in Aleppo province.
Last week, IS advanced in the area, seizing five villages from rebel forces around Marea after allegations it had used a chemical agent, possibly mustard gas, in its attacks.
The IS advances came despite an agreement between Turkey and the United States to work on the establishment of an IS-free zone in northern Aleppo.
In recent days, the US-led air campaign fighting IS in Syria has carried out strikes against the group near Marea, according to the Pentagon.
More than 240,000 people have been killed in Syria since the conflict began in March 2011 with peaceful anti-government protests.
It has evolved into a complex multi-front war, with regime and rebel forces as well as Kurds and jihadists involved in the fighting.
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