The clashes pit the Khaled Ben al-Walid Army -- which pledged allegiance to IS last year -- against Islamist rebel groups including the influential Ahrar al-Sham faction, said the Syrian Observatory for Human Rights.
At least 132 people had been killed in the fighting that raged in Daraa province near the border with Jordan and the buffer zone before the Israel-occupied Golan Heights.
The Khaled Ben al-Walid Army sparked the clashes with an attack on rebels in the west of the southern province.
The Khaled Ben al-Walid Army "wants to extend its influence in the strategic triangle between Daraa (city), Jordan and the Golan," Observatory chief Rami Abdel Rahman said.
Daraa province, the cradle of the 2011 uprising against President Bashar al-Assad's regime, is mostly held by the rebels but pro-government forces and IS are also present.
The provincial capital of the same name is divided between army and rebel control.
Syria's war has killed more than 310,000 people since it started nearly six years ago with the brutal repression of anti-regime protests.
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