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By Laila Bassam and Angus McDowall

BEIRUT (Reuters) - The Syrian army and its allies are fighting to secure and expand a precarious corridor to their comrades in Deir al-Zor, a day after they smashed through Islamic State lines to break the jihadist siege.

The army reached Deir al-Zor city on Tuesday in a sudden, days-long thrust that followed months of steady advances east across the desert, breaking a siege that had lasted three years.

However, Islamic State counter-attacks lasted through the night, the British-based Syrian Observatory for Human Rights said, as the jihadists tried to repel the army.

It points to a tough battle ahead as the army aims to move from breaching the siege to driving Islamic State from its half of the city, the sort of street-by-street warfare in which the jihadists excel.

"The next step is to liberate the city," a non-Syrian commander in the military alliance backing President Bashar al-Assad said.

Assad and his allies - Russia, Iran and Shi'ite militias including Hezbollah - will follow the relief of Deir al-Zor with an offensive along the Euphrates valley, the commander said.

The Euphrates valley cuts a lush, populous swathe of green about 260 km (160 miles) long and 10 km (6 miles) wide through the Syrian desert from Raqqa to the Iraqi border at al-Bukamal.

The area has been Islamic State's stronghold in Syria but came under attack this year when a U.S.-backed alliance of Kurdish and Arab militias besieged and assaulted Raqqa.

Rapidly losing territory in Syria and Iraq, Islamic State is falling back on the Euphrates towns downstream of Deir al-Zor, including al-Mayadin and al-Bukamal, where many expect it to make a last stand.

Still, the jihadist group specialises in urban combat, using car bombs, mines, tunnels and drones, and has held out against full-scale attack for months in some towns and cities.

It has 6,000-8,000 fighters left in Syria, despite losing most of its territory across both Iraq and Syria since September 2014, the United States-led coalition said.

FIGHTING

Parallel with their thrust towards Deir al-Zor, the Syrian army and its allies have been fighting Islamic State in its last pocket of ground in central Syria, near the town of al-Salamiya on the Homs-Aleppo highway.

On Wednesday, army advances gained control of four villages there, further tightening the pocket, a military media unit run by Assad's ally Hezbollah reported. A Syrian military source said warplanes struck IS targets in that area, destroying a command centre.

In Raqqa, the Syrian Democratic Forces alliance, backed by the U.S.-led coalition, says it has taken about 65 percent of the jihadists' former de facto capital in Syria.

Deir al-Zor lies along the southwest bank of the Euphrates. The government enclave includes the northern half of the city and the Brigade 137 military base to the west.

The government also holds an air base and nearby streets, separated from the rest of the enclave by hundreds of metres of IS-held ground and still cut off from the advancing army.

Instead of breaking the siege along the main road from Palmyra, stretches of which remain in Islamic State hands, the army reached the Brigade 137 along a narrow salient from the northwest.

"Work is progressing to secure the route and widen the flanks so as not to be cut or targeted by Daesh," the commander said, using the Arabic acronym for Islamic State.

The route from the west into Brigade 137 is only about 500 metres (yards) wide, the commander said.

Islamic State counter-attacks in that area managed to cut the corridor into the enclave for several hours on Tuesday night using six car bombs, the Observatory reported.

The army will also push towards the still besieged airbase, southwards from the Brigade 137 camp and eastwards along the main highway, the commander said.

(This version of the story corrects coalition comment on lost territory, adds Syrian military source).

(Writing by Angus McDowall; Editing by Angus MacSwan and Alison Williams)

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Reuters