(Clarifies paragraph 6)
* Kurdish fighters say launch midnight assault on Islamists
* Town sits on major highway in Syria's northeast
By Tom Perry
BEIRUT, Feb 22 (Reuters) - A Kurdish group captured a town in Syria from Islamists on Saturday in a battle in which at least 28 fighters were killed, most of them Islamists, a monitoring group reported
If the Kurds can keep hold of Tal Brak, on a highway between the cities of Hassaka and Qamishli, it would mark a significant advance in their quest for wider control in the northeast.
Online Islamist activists said fighting was still going on, but the British-based Syrian Observatory for Human Rights said the Kurdish People's Protection Units had taken the town.
Syrian Kurds have expanded their sway in the northeast, where they are setting up their own administration, since the revolt against President Bashar al-Assad began three years ago.
The People's Protection Units said in a statement they had taken Tal Brak after a midnight assault on fighters of the Islamic State of Iraq and the Levant (ISIL) and other militants.
It said Kurdish fighters were in possession of the bodies of 16 of the 50 "armed mercenaries" they had killed, and had taken 42 prisoners. It said three Kurdish fighters had also been killed.
The Syrian Observatory, an opposition-affiliated watchdog, said at least 25 Islamists had been killed.
Redur Xelil, spokesman for the People's Protection Units, said: "The operation was over at 5 a.m. and the armed groups and mercenaries that were there were expelled."
"The town is completely controlled by the People's Protection Units," he told Reuters by telephone, adding that nearby villages were also under the group's control.
BLOODY BATTLE AROUND NEW YEAR
Islamists have eclipsed secular groups in the revolt against Assad, but are also now at war with each other in much of Syria, with the Nusra Front and other Islamists fighting ISIL - a group disavowed by al Qaeda. They have also fought the Kurds.
Long oppressed by Damascus, the Kurds have been largely left to their own devices by Syrian government forces fighting rebels elsewhere. That has drawn accusations that they have made a de facto alliance with Assad - a charge the Kurds deny.
The People's Protection Units fought fierce battles with the Islamists in the Tal Brak area around the turn of the year, when the Observatory said 60 fighters - 39 from the People's Protection Units and 21 Islamists - were killed.
Rami Abdelrahman, the Observatory's founder, said Tal Brak's proximity to the Iraqi border meant that losing it was a blow to the Islamist groups that bring supplies from Iraq.
On Twitter, one Islamist activist said the battle was not over. "The clashes are continuing ... in Tal Brak. The (Kurdish) militia has not seized complete control," wrote the activist, who describes himself as a media activist from the area.
The Observatory reported battles in areas outside the town.
The People's Protection Units said they had seized four vehicles from the Islamists, as well as heavy machineguns and other weapons, in Tal Brak.
Kurds in Syria, who number around 2 million, declared their provincial government in the northeast on Jan. 21.
While local leaders say they have no plans for secession, their push for autonomy has unnerved neighbouring Turkey, which faces similar demands from its own Kurdish population. (Writing by Tom Perry; Editing by Alistair Lyon)