The Islamic State group had last week succeeded in expelling Syrian forces from Mayadeen two days after they entered the town.
The Islamic State group had last week succeeded in expelling Syrian forces from Mayadeen two days after they entered the town, which lies about 420 kilometres (260 miles) east of Damascus and is one of IS's main remaining bastions.
The latest Russian-backed regime push has isolated the jihadists defending Mayadeen, cutting off the main road to their stronghold of Albu Kamal on the Iraqi border, and leaving the Euphrates river as their only escape.
"Regime forces, led on the ground by Russian forces, took control of at least four neighbourhoods of Mayadeen," Observatory chief Rami Abdel Rahman said.
The state news agency SANA confirmed that regime forces had re-entered Mayadeen.
A Syrian army source had recently described Mayadeen as the "military capital" of the jihadist organisation in the eastern oil-rich province of Deir Ezzor.
Abdel Rahman, whose organisation relies on a network of sources inside Syria, said Russian forces are "overseeing military operations, taking part in the fighting and carrying out air strikes".
The fresh advance by regime forces come in spite of reinforcements of around 1,000 men IS received from Iraq, according to the Observatory.
IS has lost most of the vast swathes of land it had seized when it proclaimed a self-styled "caliphate" straddling Iraq and Syria in 2014.
In July, it lost Mosul, the largest city it ever controlled, and this month the town of Hawija, also in Iraq.
The group is battling an offensive led by a Kurdish-Arab alliance backed by a US-led coalition on the city of Raqa, which was once the de facto Syrian capital of its "caliphate".