The US military is pleased with developments in Libya, where government forces are battling to wrest control of the coastal city of Sirte from the Islamic State group, an official said Thursday.

"We certainly are encouraged by the progress we see those government forces making and we will continue to watch it very closely," Pentagon press secretary Peter Cook said.

"The fact that they are now under pressure in Libya... we think is a good thing and suggests that the Government of National Accord and the forces supporting that government are making progress."

Sirte has become the IS group's Libyan stronghold and its loss would be a huge setback for the jihadists. Unity government forces on Thursday battled their way into the center of the city.

The US military only has a limited presence in Libya, where small teams of US special operations forces are working to gain intelligence.

And US forces in February conducted an air strike on a jihadist training camp near the city of Sabratha, killing dozens.

"We haven't made any additional decisions about US action at this point," Cook said.

"We are obviously watching it very closely... if there isn't a need for the United States and other nations to get involved in Libya, that would be a welcome thing."

Authorities estimate the IS group has 5,000 fighters in Libya but its strength inside Sirte and the number of civilians living in the city are unavailable.

Libya spiraled into chaos after longtime dictator Moamer Kadhafi was ousted and killed in October 2011, with two governments vying for power and armed groups battling to control vast energy resources.

Exploiting Libya's power vacuum, IS jihadists established a foothold in Libya, especially in Sirte.