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Syria Democratic Forces female fighters embrace each other in the city of Manbij, in Aleppo Governorate, Syria, August 10, 2016. REUTERS/Rodi Said

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By John Davison and Roberta Rampton

BEIRUT/HANGZHOU, China (Reuters) - Syrian government forces and their allies again laid siege to rebel-held eastern Aleppo on Sunday, while Turkish-backed fighters drove Islamic State from all the areas along its border, in two significant but separate developments in the multi-sided conflict.

The fighting - two potential turning points in the conflict if the gains can be sustained - complicated efforts by the United States and Russia to reach a ceasefire deal for Syria, whose civil war is in its sixth year.

Talks by the Cold War foes on a ceasefire were set to continue on Monday, but "we're not there yet," U.S. President Barack Obama told reporters at the G20 summit in the Chinese city of Hangzhou.

Syrian President Bashar al-Assad wants to fully recapture divided Aleppo, Syria's largest city before the war. Gains made by Damascus have relied heavily on Russian air support since September last year.

On Sunday, intense aerial and artillery attacks helped government forces and their allies drive insurgents out of the Ramousah military complex in Aleppo, according to rebels and a monitoring group.

The rebels had captured the complex in early August, breaking through a government siege of eastern Aleppo . Sunday's government advances resulted in a new siege of the area, said Zakaria Malahifji of the Fastaqim rebel group.

The Syrian Observatory for Human Rights, a Britain-based group monitoring the war, and a Damascus military source also reported the new siege.

Russian support has turned the war in Assad's favour in many areas, although rebels have made some gains, including in Hama province, further south.

Rebels launched a campaign on Sunday to try to capture the town of Maan, north of the city of Hama, the provincial capital, said Mohammed Rasheed, a spokesman for rebel group Jaish al-Nasr. Advances by the insurgents in recent days have brought them to within 10 km (six miles) of government-controlled Hama, the Observatory and insurgents say.

TURKISH OFFENSIVE DRIVES OUT IS

In a separate battle further east, rebels backed by Turkey - and made up of Aleppo-based factions - drove Islamic State militants from all areas they controlled along the Syrian-Turkish border, according to the rebels, Ankara and the Observatory.

Some 10 days ago, Turkey mounted its first full-scale incursion into Syrian territory since the conflict began in 2011, aimed at IS and at U.S.-backed Kurdish forces in the area, which have also been battling the jihadists.

The Turkish-backed advance denied Islamic State its main route to the outside world, through which it has moved fighters and weapons. It was another blow for the jihadist group, which is under pressure in its self-proclaimed caliphate in Syria and Iraq.

But Turkey's operation was focused just as firmly against U.S.-backed Kurdish forces, which it fired at last week and which it insists must withdraw to east of the Euphrates river.

Ankara fears that advances by the Kurdish YPG militia, which has been one of the most effective partners for the U.S. coalition fighting IS, will embolden Kurdish militants on its own soil.

With support from Turkish tanks and warplanes, the rebels now appear to have secured a roughly 90 km stretch of land that Turkey long wanted to control to keep out jihadists and to stop the advance of the YPG.

'GRAVE DIFFERENCES'

Sunday's advances illustrate the complexity of the Syrian conflict, which has drawn in most world and regional powers. Efforts to end the fighting have been repeatedly confounded.

A deal brokered in February by the United States and Russia fell apart earlier this year. Even before Sunday's battlefield developments, U.S. President Obama said that the two countries were struggling to reach a new ceasefire agreement between Damascus and rebels.

"We're not there yet," Obama told reporters after a meeting with British Prime Minister Theresa May in Hangzhou. "We have grave differences with the Russians in terms of both the parties we support but also the process that is required to bring about peace in Syria."

An agreement that would stop the fighting and allow more humanitarian deliveries had looked set to be announced by U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov in Hangzhou.

Two lecterns had been set up in a room for a news conference. But Kerry emerged alone to say a couple of issues still needed to be resolved and the two sides would resume talks on Monday. He did not elaborate.

Officials from the United States and Russia, which back opposite sides in Syria's civil war, have been meeting since Kerry travelled to Moscow in July with a proposal that would halt the fighting.

It would ensure that government fighters pulled back in some areas, including around Aleppo, to allow convoys of humanitarian aid to reach civilians caught in the fighting.

The ceasefire would be overseen through Russian-U.S. intelligence sharing and military cooperation, which would focus on fighting Islamic State and other militant groups such as al Qaeda.

The plan would need Russia to convince Assad to ground his air force, a move that Lavrov has said was not the goal.

A letter from Washington's Syria envoy, Michael Ratney, to the armed opposition, a copy of which was seen by Reuters, laid out some of the ceasefire terms.

It would oblige Russia to prevent warplanes from bombing areas held by mainstream opposition, require the withdrawal of Damascus's forces from a supply route north of Aleppo, and focus on delivery of humanitarian aid unhindered by warring sides to the city's population, said the letter, dated Sept. 3.

Fighting around Aleppo has recently cut supplies, power and water to nearly 2 million people in both government- and rebel-held areas.

In return, the United States would coordinate with Russia in fighting against al Qaeda, it said, without elaborating.

The Syrian government and Russia were also to avoid bombing areas where more moderate insurgent groups are operating close to Jabhat Fatah al-Sham, previously the al Qaeda-affiliated Nusra Front.

Kerry said he would not rush into any agreement just to see it fail again. A senior State Department official, who declined to be named, said Russia had walked back on some of issues that the sides had already agreed on, which was why both sides needed to continue talking.

(Reporting by Roberta Rampton, John Davison, Tom Miles in Geneva, Vladimir Soldatkin in Hangzhou, Jack Stubbs in Moscow; writing by John Davison, Editing by Larry King)

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