The besieged ISIL enclave centered around Baghouz on the eastern bank of the Euphrates River represents the jihadist group's last territorial foothold in the part of Syria where the US -backed forces have been fighting it.
The jihadists are now clinging on to a small sliver of land near the village of Baghouz in eastern Syria and many residents are fleeing and turning themselves in ahead of a final offensive.
Mustafa Bali, the head of the SDF media office, described the assault as the "last battle".
The SDF, spearheaded by the Kurdish YPG militia, has driven ISIS out of a swathe of territory in northern and eastern Syria over the last four years.
Hundreds of civilians are also believed to be inside.
Bali said there could be up to 600 ISIS fighters still inside the pocket, majority foreigners.
"It should be formally announced sometime, probably next week, that we will have 100 percent of the caliphate", Trump told representatives of the 79-member, US-led coalition fighting IS. It said US-led coalition warplanes are giving cover to advancing SDF fighters.
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At its height, the jihadist proto-state proclaimed by IS in Syria and Iraq in June 2014 was roughly the size of Britain.
After driving the jihadists from their Syrian headquarters at Raqqa in October 2017, the SDF advanced southwards into Deir al-Zor province, attacking the jihadists in the territory on the eastern bank of the Euphrates River.
On Thursday, the coalition said the "caliphate" had massively shrunk.
US officials have said in recent weeks that Isis has lost 99.5% of its territory and is holding on to fewer than 5 square kilometres in Syria, or less than 2 square miles, where the bulk of the fighters are concentrated.
The Britain-based Syrian Observatory for Human Rights, a war monitor, said SDF fighters are advancing "cautiously" due to mines planted by IS gunmen.
The jihadists maintain sleeper cells along the border with Iraq, as well as in cities they once ruled, and have carried out periodic hit-and-run attacks.
In that time, more than 1,200 IS militants, more than 670 SDF fighters, and around 400 civilians have been killed in the fighting, the Observatory says.