US, Saudi and Emirati warplanes broadened their bombardment to target the oil installations in eastern Syria that have helped fund the jihadist group`s brutal rise from rebel faction to alleged global threat.
The strikes came as Obama urged leaders gathered at the UN General Assembly to join his coalition and convinced the Security Council to back a resolution to stem the flow of foreign fighters that has swelled the IS ranks.
Belgium and the Netherlands committed warplanes to Iraq and Britain said its parliament would vote on Friday on following suit.
`The United States of America will work with a broad coalition to dismantle this network of death,` Obama told the UN about the Islamic State group, which has grabbed vast areas of Iraq and Syria.
`Today I ask the world to join in this effort.`
Meanwhile, an IS-linked group in Algeria which had demanded France halt its participation in the strikes posted video footage of the execution of an abducted Frenchman.
`We will use our military might in a campaign of air strikes to roll back ISIL,` Obama declared, using the acronym for the former Islamic State of Iraq and the Levant, since renamed the Islamic State.
Overnight Tuesday to Wednesday, US air raids targeted IS fighters threatening the Kurdish regional capital in Iraq and damaged eight militant vehicles operating in eastern Syria near the Iraqi border.
Then as night fell again on Wednesday, Arab jets joined the US-led bombardment again as the target list was expanded to include economic assets.
The latest round of air raids focused on 12 targets in eastern Syria, where the IS extremists control small-scale oil refineries.
`These 12 targets were what we call modular oil refineries,` Pentagon spokesman Rear Admiral John Kirby told CNN.
`They were struck with precision-guided missiles by coalition aircraft. In fact, there were more coalition aircraft in the skies on these particular missions than US (planes),` he said.
Alongside US aviation and cruise missiles, Saudi Arabia, Bahrain, the United Arab Emirates and Jordan have hit targets in Syria and France in Iraq. Qatar is providing logistical support.
At the UN, Obama and French President Francois Hollande led international condemnation of the murder of the French hiker, 55-year-old Herve Gourdel, by the IS-linked Jund al-Khilifa.
Paris opposed the 2003 US-led invasion of Iraq but has sent Rafale fighters into action over Iraq - but not to the parallel campaign in Syria - and Hollande vowed not to give in to the IS group.
`The fight against terrorism must continue and be stepped up,` Hollande said.
IS militants in Syria had already killed two American journalists and a British aid worker, but Gourdel`s death was the first at the hands of an allied group outside the core area since the US campaign began in early August.
Obama said the United States stood with France and chaired a UN Security Council meeting which unanimously adopted a binding resolution to turn back the flow of foreign fighters heading to Iraq and Syria.
It requires all countries to adopt laws that would make it a serious crime for their nationals to join jihadist groups such as Islamic State and Al-Nusra Front, or risk economic sanctions or military action.
On the sidelines of the assembly, Prime Minister David Cameron said the British parliament would hold an extraordinary session on Friday to vote joining the strikes, as requested by Baghdad.
Cameron meanwhile declared Iran could be `part of the solution` in defeating IS jihadists after landmark talks with Iranian President Hassan Rouhani.
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