The Syrian Democratic Forces (SDF), an alliance of Kurdish and Arab militias supported by a US -led global coalition, is fighting Islamic State at the entrance to the dam, Jihan Sheikh Ahmed, the SDF spokeswoman for the Raqqa campaign, said.
This week, the SDF with air and fire support by U.S. military, have reached the dam's entrance through clashes with IS militants.
The Syrian Observatory for Human Rights, a Britain-based war monitor, said the SDF had nearly completely captured Karama but that clashes between it and Daesh were still going on.
Earlier in the week, another SDF spokesperson, Talal Selo, said in an interview with Syrian daily Al-Watan that no more than two weeks were needed to block Raqqa and start liberating the city.
The US military has provided air and artillery support involving Apache helicopter gunships to help the SDF in an offensive for the strategically important Tabqa Dam near Raqa.
The coalition said the dam has not been structurally damaged, to its knowledge, and that it had not targeted the dam.
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Mohammed Khedhr of Sound and Picture Organization that documents IS violations also confirmed that battles are taking place inside Karama, about 15 kilometers (10 miles) east of Raqqa, as SDF try to take it.
A United States spokesman for the coalition said last week that seizing the dam would "give the SDF a strategic advantage and launching point needed for the liberation" of Raqa.
US-backed Syrian Kurdish forces captured a strategically important air base from ISIL in north Syria on Sunday in the first major victory for the group since the USA airlifted the forces behind enemy lines four days ago.
Earlier this week, the Pentagon said the US-led coalition dropped local ground forces behind enemy lines for the first time near the ISIS-held town of Tabqa.
The offensive to liberate the city, captured by IS militants in 2013, has intensified this week, when additional USA and Syrian opposition forces have been airdropped to the Raqqa province.
IS issued warnings through its propaganda agency Amaq that the dam "is threatened with collapse at any moment because of American strikes and a large rise in water levels".
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But it warned that damage to the dam "could lead to massive scale flooding across Raqqa and as far away as Deir Az-Zour" province to the southeast.
SDF fighters have been on the offensive since November under the cover of airstrikes by the US -led coalition with the aim of eventually surrounding Raqqa and storming it.
The SNC says it believes coalition forces were behind an airstrike that killed at least 30 civilians sheltering in a school in the countryside outside Raqqa on March 21.
The coalition-backed fighters, which carried out heavy shelling with aerial cover provided by warplanes, made advances, the observatory said.
A Syrian Democratic Forces fighter walks with his weapon in northern Raqqa province.
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