The Turkish-backed Free Syrian Army (FSA) were on Thursday pushed out of the Daesh-held town of al-Bab in northern Syria.
The FSA entered al-Bab with the Turkish army on Wednesday and faced resistance from Daesh in a battle to retake the city.
At least 16 Turkish soldiers were killed during heavy clashes since entering the city, Turkey's defence minister said on Thursday.
Turkey's army said 140 Daesh gunmen were killed as clashes intensified.
The FSA had earlier gained full control of the highway from al-Bab to Aleppo, and Turkish warplanes had destroyed nearly 65 Daesh targets, the army said.
The FSA has been trying to retake al-Bab from Daesh as part of Operation Euphrates Shield, which was launched by Turkey in August.
The aim of the operation is to clear Turkey's border with Syria of Daesh and the YPG – a Syrian wing of the PKK, the latter is recognised as a terrorist organisation by the United States, the European Union and Turkey.
Speaking at a parliamentary commission in Ankara, Turkish Defence Minister Fikri Isik said a total of 35 Turkish soldiers have been killed and about 1,005 Daesh gunmen have been "neutralised" since the operation began in August.
TRT World's Abubakr al Shamahi reports from the Turkish city of Gaziantep near the border with Syria.