By John Davison and Tom Perry

AIN ISSA, Syria/BEIRUT (Reuters) – Islamic State is on the verge of defeat in Raqqa, once its de facto Syrian capital, and the city may finally be cleared of the jihadists on Saturday or Sunday, the Syrian Kurdish YPG militia told Reuters.

A local official said tribal elders were seeking to broker a deal where remaining Islamic State fighters, including foreigners, would leave the city, taking civilians with them as human shields.

The Syrian Democratic Forces (SDF), backed by air strikes and special forces from a U.S.-led international coalition, have been battling since June to oust Islamic State from Raqqa, a base that it had used to plan attacks against the West.

The retaking of Raqqa will be a major milestone in efforts to roll back the theocratic “caliphate” that Islamic State declared in Syria and Iraq, where earlier this year it was driven from the city of Mosul.

“The battles are continuing in Raqqa city,” YPG spokesman Nouri Mahmoud, whose group dominates the SDF, told Reuters by telephone. “Daesh (Islamic State) is on the verge of being finished. Today or tomorrow, the city may be liberated.”

The U.S.-led coalition said a convoy was set to depart Raqqa on Saturday under an arrangement brokered by local officials.

Its statement said the coalition was not involved in the discussions, and described the arrangement as “a civilian evacuation”.

Its spokesman, Col. Ryan Dillon, said the coalition’s stance was that IS fighters must surrender unconditionally, but added that he could not comment on who would be in the convoy. He said difficult fighting was expected in the days ahead.

“SAVING INNOCENT LIVES”

The coalition statement said the arrangement brokered by the Raqqa Civil Council and local Arab tribal elders on Oct. 12 was “designed to minimize civilian casualties and purportedly excludes foreign Daesh terrorists”.

The coalition believed the arrangement would “save innocent lives and allow Syrian Democratic Forces and the coalition to focus on defeating Daesh terrorists in Raqqa with less risk of civilian casualties”, it said.

Omar Alloush, a member of the Raqqa Civil Council, set up to run Raqqa after it is freed from IS, said the 100 Islamic State fighters who had already surrendered had been convinced to do so during talks with the tribal elders.

“Others didn’t surrender, so now they’re looking for a plan where they (IS) leave and take civilian hostages with them to another place far from the city, and then release the civilians,” he told Reuters in an interview in Ain Issa, north of Raqqa. The IS fighters would go to remaining territory held by the group in Syria, he said.

The deal could happen as soon as Saturday, he said.

A tribal leader said he expected the evacuation to take place on Saturday or Sunday.

BUSES ARRIVE

An activist group that reports on Raqqa, Raqqa Is Being Slaughtered Silently, said on its Facebook page that dozens of buses had entered Raqqa city overnight from the countryside to the north.

The Syrian Observatory for Human Rights, a British-based organization that reports on the war, said Syrian Islamic State fighters and their families had already left the city, and buses had arrived to evacuate remaining foreign fighters and their families.

The Syrian army, which is supported by Iran-backed militias and the Russian air force, declared another significant victory over Islamic State on Saturday, saying it had captured the town of al-Mayadin in Deir al-Zor province.

The eastern province is Islamic State’s last major foothold in Syria, and it is under attack there from the SDF on one side and Syrian government forces supported by Iran-backed militias and Russian air strikes on the other.

Islamic State fighters had previously agreed to an evacuation last August, from an area on the Syrian-Lebanese border.

But as their convoy moved towards Islamic State-held territory in eastern Syria, coalition planes blocked its route by cratering roads, destroying bridges and attacking nearby Islamic State vehicles.

(Reporting by Lisa Barrington and Tom Perry in Beirut; Editing by Kevin Liffey)