Troops seized eastern suburbs of Damascus from rebels late on Sunday, opposition activists said, after two days of fighting only a few kilometres from the centre of power of President Bashar al-Assad.
"The Free Syrian Army has made a tactical withdrawal. Regime forces have re-occupied the suburbs and started making house-to-house arrests," an activist named Kamal said by phone from the eastern al-Ghouta area on the edge of the capital.
A spokesman for the Free Syrian Army of defectors fighting Assad's forces appeared to confirm that account.
"Tanks have gone in but they do not know where the Free Syrian Army is. We are still operating close to Damascus," Maher al-Naimi told Reuters by phone from Turkey.
Activists said earlier on Sunday soldiers had moved into the suburbs at dawn, along with at least 50 tanks and other armoured vehicles. At least 19 civilians and rebel fighters were killed in that initial attack, they said.
Fighters had taken over districts less than eight km (five miles) from the heart of the city. The areas have seen repeated protests against Assad's rule and crackdowns by troops in the 10-month-old uprising.
"It's urban war. There are bodies in the street," said an activist speaking from the suburb of Kfar Batna.
Residents of central Damascus reported seeing soldiers and police deployed around main squares.
The escalating bloodshed prompted the Arab League to suspend the work of its monitors on Saturday.
Arab foreign ministers, who have urged Assad to step down and make way for a government of national unity, will discuss the crisis on Feb 5.
Arab peace plan
Arab League chief Nabil Elaraby left for New York where he will brief representatives of the UN Security Council on Tuesday to seek support for the Arab peace plan.
He will be joined by Qatari Prime Minister Sheikh Hamad bin Jassim al-Thani, whose country heads the League's committee charged with overseeing Syria.
Elaraby said he hoped to overcome resistance from Beijing and Moscow over endorsing the Arab proposals.
A Syrian government official said the Arab League decision to suspend monitoring would "put pressure on (Security Council) deliberations with the aim of calling for foreign intervention and encouraging armed groups to increase violence".
Assad blames the violence on foreign-backed militants.
The opposition Syrian Observatory for Human Rights reported 41 civilian deaths across Syria on Sunday, including 14 in Homs province and 12 in the city of Hama.
Thirty-one soldiers and members of the security forces were also killed, most in two attacks by deserters in the northern province of Idlib, it said.
State news agency SANA reported the military funerals of 28 soldiers and police on Saturday and another 23 on Sunday.
After mass demonstrations against his rule erupted last spring, Assad launched a military crackdown.
Growing numbers of army deserters and gunmen have joined the protesters in a country of 23 million people regarded as a pivotal state at the heart of the Middle East.
The insurgency has crept closer to the capital. The suburbs, a string of mainly conservative Sunni Muslim towns, known as al-Ghouta, are home to the bulk of Damascus's population.
One activist said mosques there had been turned into opposition field hospitals and were appealing for blood supplies.
"They (the authorities) cut off the electricity. Petrol stations are empty and the army is preventing people from leaving to get fuel for generators or heating," he said.
The Damascus suburbs have seen large demonstrations demanding the removal of Assad, a member of the minority Alawite sect, an offshoot of Shi'ite Islam that has dominated the mostly Sunni Muslim country for the last five decades.
In Rankous, 30 km (20 miles) north of Damascus by the Lebanese border, Assad's forces have killed at least 33 people in recent days in an attack to dislodge army defectors and insurgents, activists and residents said on Sunday.
Iran says Assad needs time
Iran said Assad must be given time to implement reforms.
Tehran at first wholeheartedly supported Assad's hardline stance against the 10 months of popular protests. It has since tempered its rhetoric, but it condemns what it calls foreign interference in Syrian affairs.
"They have to have a free election, they have to have the right constitution, they have to allow different political parties to have their activities freely in the country. And this is what he has promised," foreign minister Ali Akbar Salehi said.
"We think that Syria has to be given the choice of time so that by (that) time they can do the reforms."
Syria has said it will hold a referendum on a new constitution soon, before a multi-party parliamentary election that has been much postponed. Under the present constitution, Assad's Baath party is "the leader of the state and society".
France, which has been leading calls for stronger international action on Syria, said the Arab League decision highlighted the need to act.
The United Nations said in December more than 5,000 people had been killed in the protests and crackdown. Syria says more than 2,000 security force members have been killed by militants.
On Friday, the UN Security Council discussed a European-Arab draft resolution aimed at halting the bloodshed. Britain and France said they hoped to put it to a vote next week.
Russia joined China in vetoing a previous Western draft resolution in October, and has said it wants a Syrian-led political process, not "an Arab League-imposed outcome" or Libyan-style "regime change".