The Syrian army kept up its bombardment of rebel strongholds on Sunday despite an international outcry over the killing of 92 people, a third of them children, in the shelling of a central town.
Arab and Western governments expressed outrage at the "massacre" in the town of Houla on Friday and Saturday.
But the rebel Free Syrian Army warned that unless the international community took concrete action it would no longer be bound by a UN-backed peace plan that was supposed to start with a ceasefire last month.
Government troops raked rebel neighbourhoods of the central city of Hama with heavy machinegun fire, while the town of Rastan to its south came under artillery fire for a 14th straight day, a human rights watchdog said.
Rebel fighters who pulled out of the flashpoint central city of Homs earlier this year in the face of a devastating assault by the army are holed up in Rastan, activists say.
"The town is being hit at a rate of two shells a minute," the Britain-based Syrian Observatory for Human Rights said.
Troops loyal to President Bashar al-Assad also clashed with rebel fighters in the town of Harasta near Damascus.
The head of the UN military observer mission overseeing the ceasefire that was supposed to take effect on Apil 12 called what happened in Houla a "brutal tragedy."
"This morning UN military and civilian observers went to Houla and counted more than 32 children and over 60 adults killed," Major General Robert Mood told reporters in Damascus on Saturday.
"Whoever started, whoever responded and whoever carried out this deplorable act of violence should be held responsible," Mood said.
"Those using violence for their own agendas will create more instability, more unpredictability and may lead the country to civil war," he added.
UN chief Ban Ki-moon and Kofi Annan, the international envoy who brokered the UN-backed peace plan, said the massacre was a "brutal" breach of international law.
"This appalling and brutal crime, involving indiscriminate and disproportionate use of force, is a flagrant violation of international law," a UN spokesman quoted Ban and Annan as saying.
US secretary of state Hillary Clinton also condemned the "atrocity" and said Washington would would work with its international allies to increase the pressure on President Bashar al-Assad and his "cronies"
"Rule by murder and fear must come to an end," she declared.
Mood confirmed that artillery and tanks had pounded Houla and called "on the Syrian government to cease the use of heavy weapons and to all parties to cease violence in all its forms."
Amateur videos posted on YouTube showed horrifying images of dead children, with at least one child's head partly blown away.
Angry residents voiced outrage over the killings as a UN team visited Houla on Saturday.
"Some of the children were less than eight months old. What did they do? Did they also carry rocket-propelled grenades? " one man shouted at a visibly embarrassed UN observer.
"We are human. Doesn't the regime fear God?" he added.
Another video posted on YouTube showed a mass grave filled with bodies wrapped in white sheets.
"God curse you, Bashar al-Assad," says the activist filming the video.
"We get killed and the world watches.
"Go to hell, you and your initiatives," the man adds, in reference to the international community.
Arab League foreign ministers are to hold an emergency meeting to discuss the killings, the bloc's current president Kuwait said.
"Kuwait will contact members of the Arab League to hold an emergency ministerial meeting to study the situation and take measures to put an end to the oppressive practices against the Syrian people," a foreign ministry statement said.
Kuwait has also made contacts at regional and international levels "to urge the international community to assume its responsibility to stop the bloodshed," the ministry said.
Annan peace plan going to 'hell'
A statement by the Free Syrian Army said it could no longer commit to the ceasefire and that unless the Security Council takes urgent steps to protect civilians, "Annan's plan is going to go to hell."
Killings in Houla and elsewhere are taking place "under the eyes of the UN observers," the rebel groups said, urging the international community to "announce the failure of the Annan plan."
The opposition Syrian National Council for its part demanded prompt action by the UN Security Council, which is to discuss the crisis on Wednesday.
The Britain-based Observatory said the shelling of Houla began at around midday on Friday and continued until dawn on Saturday, and said 114 people were killed.
State news agency SANA blamed "armed terrorist groups" for the killings, adding that "clashes led to the killing of several terrorists and the martyrdom of several members of the special forces."
The Observatory says more than 12,600 people have been killed since the uprising against Assad's regime erupted in March last year, nearly 1,500 of them since the UN-backed ceasefire was supposed to take effect.