Yarmouk ISIS Palestinian refugee camp Syria
A Palestinian flag flutters atop a damaged building at the Palestinian refugee camp of Yarmouk, south of DamascusReuters

Islamic State (Isis) militants have seized most of a Palestinian refugee camp in Syria, forcing many to flee, local activists said.

The London-based Syrian Observatory for Human Rights (SOHR) monitoring group said the Islamist militants have taken over 90% of the Yarmouk camp in the outskirts of Damascus.

The camp on the southern edge of the Syrian capital has been the scene of a violent three-way fight since it was entered by IS militants earlier this week.

The Sunni extremist group struck an unusual allegiance with rival jihadi group Jabhat al-Nusra, to wrestle control Yarmouk from rebels loyal to Palestinian faction Hamas, which had been fighting against regime troops.

"Jabhat al-Nusra and IS were able to take control on 90% of the Yarmouk camp after violent clashes against Aktaf Bait al-Maqdis and Islamic battalions," SOHR reported, adding that two militants from the latter group were beheaded by IS.

"Five soldiers in regime forces were killed after clashes against Islamic battalions in the camp," SOHR added, reporting also bombardments by regime forces in the area.

IS and Jabhat al-Nusra, which is affiliated to al-Qaeda, have been fighting each other in other areas of Syria.

'Affront to the humanity'

The UN expressed concern about the situation in the refugee camp which was once home to between 100,000 and 150,000 Palestinians and Syrians.

"The situation in Yarmouk is an affront to the humanity of all of us, a source of universal shame," UN Relief and Works Agency (UNRWA) spokesman Chris Gunness told Reuters.

"Yarmouk is a test, a challenge for the international community. We must not fail. The credibility of the international system itself is at stake".

Syrian rebels occupied Yarmouk until February 2014 when they agreed to leave Palestinian anti-Assad forces inside. The ensuing siege has forced almost 90% of residents to leave and the remaining 18,000 face severe shortages of food and water.

During a visit to the camp in early 2014, UNRWA chief Filippo Grandi described the scenes witnessed as "shocking" comparing the people queuing for food to "the appearance of ghosts".

Syria Direct, a news site that collates information from activists inside the war-torn country, quoted a source inside Yarmouk as saying that IS intended on hitting back against the Palestinian militant organisation Hamas.

A group within Hamas in Yarmouk reportedly kidnapped 10 IS members on Tuesday after the radical Islamist group assassinated one of its leaders.