Turkish President Recep Tayyip Erdogan said in televised comments in the Black Sea province of Rize: "We are now advancing. Where? To Dabiq."
Turkey launched an unprecedented operation inside Syria on August 24, helping Syrian rebels to rid its frontier of IS jihadists and Syrian Kurdish militia.
In the operation's early weeks, Jarabulus and Al-Rai became the first two major settlements to be captured from the jihadists.
The Syrian rebels, supported by Turkish planes and tanks, seized a strategic hilly region from IS and were now only around 1.5 kilometres (one mile) from Dabiq, according to the British-based Syrian Observatory for Human Rights.

Free Syrian Army fire a machine gun mounted on a vehicle deploy during fighting against the Islamic State (IS) group jihadists Source: AAP
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"Two hours ago, the rebels started their attack to control Dabiq. The rebels came from Al-Rai," it said.
Observatory head Rami Abdel Rahman said the advance was backed by heavy artillery from Turkish-backed forces.
Dabiq holds crucial ideological importance for IS because of a Sunni prophecy that states it will be the site of an end-of-times battle between Christian forces and Muslims.
The town itself has negligible military value compared with the strategic IS-controlled cities of Raqa in Syria and Mosul in Iraq.
Peace talks flounder
Syria talks convened by US Secretary of State John Kerry in the Swiss city of Lausanne ended on Saturday evening after more than four hours without any joint ministerial statement from the nine countries.
Kerry was seeking a new path to peace after failing to secure a ceasefire in direct talks with Russia amid mounting international outrage over the Russian and Syrian bombardment of rebel-held eastern Aleppo.
Kerry hosted Russian Foreign Minister Sergei Lavrov and seven foreign ministers from the region - from Iran, Iraq, Saudi Arabia, Turkey, Qatar, Jordan and Egypt - weeks after the collapse of a painstakingly crafted US-Russian ceasefire plan that many saw as the last hope for peace this year.
Lavrov, who had said he had "no special expectations" for Saturday's meeting, later told Russian news agencies that the countries had agreed to continue contacts in the near future aimed at ending the Syria crisis. The parties had discussed several "interesting ideas", he said without elaboration.

The delegation together around a table during a meeting where they discussed the crisis in Syria, in Lausanne, Switzerland (AAP) Source: AAP
"This is going to be, as it has been now for several years, a very difficult process," a senior US official said before the talks began.
Europe was not represented at the meeting, held in a luxury hotel on Lake Geneva. But France's Foreign Ministry confirmed that foreign ministers of like-minded nations planned to meet to discuss Syria in London on Sunday.
Since the breakdown of US-Russia cooperation, long the backbone of efforts to end the war in Syria, US officials have worked on a number of ideas, and although no breakthrough was expected, the regional format could be the basis of a new process, the US official said.
Dabiq symbolic for IS
But among IS supporters on social media, Dabiq has become a byword for a struggle against the West, with Washington and its allies bombing jihadists portrayed as modern-day Crusaders.
"The lions of Islam have raised the banner of the Caliphate in Dabiq," one Tunisian IS supporter on Twitter in 2014, shortly after the jihadists took the town. "Now they await the arrival of the Crusader army."
Earlier this week, IS tried to downplay the advancing rebel forces in its Al-Naba online pamphlet, saying the major battle for the town was yet to come.
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Anti-IS fighters and their Turkish backers "have amassed in Aleppo, announcing Dabiq as their major goal," and thinking they could score "a great moral victory against the Islamic State."
But "the great epic of Dabiq will be preceded by great events and apocalyptic omens," the pamphlet, published Thursday, said.
"These hit-and-run battles in Dabiq and its outskirts -- the lesser Dabiq battle -- will end in the greater Dabiq epic," the group added.
Dabiq is also the name of the jihadists' sleek English-language propaganda magazine. Every new edition opens with a quote by Abu Musab al-Zarqawi, the late leader of IS's precursor, the Islamic State of Iraq.
"The spark has been ignited in Iraq, and its flames will grow until they burn the Crusader armies in Dabiq," he once said.

