Heavy fighting erupted Sunday as US-backed forces attacked the last ISIS stronghold in Syria amid a final push to clear the jihadist group from the war-torn country.
The SDF fighters also face the threat of sniper fire, so are moving at a slow pace to avoid casualties.
A total of 63,500 refugees, most of whom are the Islamic State (IS) militants and their families fleeing the last IS-held areas in eastern Syria, are living in the al-Hol camp in northeastern Syria, a war monitor reported Saturday.
Air strikes destroyed IS stores and vehicles, the SDF said.
According to the observatory SDF fighters managed to advance to some parts of the Baghuz camp and the agriculture fields around the village where Islamic State militants are still holed in.
They have regularly been "releasing certain numbers of people, including fighters, in controlled amounts" in an attempt to buy time, he said.
On Tuesday about 500 ISIS fighters surrendered to SDF forces.
The battle to completely retake the pocket is likely to take three days, an SDF official, Aras Orkesh, said earlier.
The senior US defense official said the USA and the SDF had greatly underestimated not only the number of IS fighters and affiliated civilians holed up in the final slice of IS territory, but also the amount of time it would take to finish off the fight.
Although the SDF estimates the battle will take another three days, the USA defense official said it could take weeks to fully retake Baghouz.
Warplanes flew above Baghouz, a cluster of houses on the banks of the Euphrates at the Iraqi border where Islamic State fighters still hold out, and smoke rose from the area along with the sound of intermittent clashes.
Since December, almost 59,000 people have left the last IS redoubt, according to the Syrian Observatory for Human Rights, around a tenth of them suspected militant fighters.
The SDF pushed into the encampment some 10 days ago, discovering spent ammunition lying between zig-zagging trenches, scorched pots and pans, and scraps of clothes left behind. Most were underground, and there is no sign they're anywhere near clear of the area.
Once the village is taken, the United States and its allies are expected to formally declare the end of the "caliphate" proclaimed by IS in 2014.
How long will this offensive continue?
In recent days thousands more men and women - including those who once flocked to join IS from across the globe - left the IS pocket.
US President Donald Trump in December stunned his allies when he declared his country would pull out all 2,000 American troops from Syria because IS had been defeated.