Heavy clashes were underway Saturday inside the Syrian rebel bastion of Yabrud near the border with Lebanon, a Syrian military source said, a day after government troops entered the town.
Yabrud sits near key rebel supply lines stretching into Lebanon, and its fall would deal a major blow to the rebels as the war enters its fourth year.
"Fierce clashes are taking place inside the eastern neighbourhoods of Yabrud," the source said, adding that "the 13 rebel chiefs leading operations are dead".
The source said there had been "very many deaths among the insurgents" in the fighting.
Syrian state television broadcast footage from a hill overlooking the town, saying "the Syrian army is progressing in the town and spreading its control over most of the areas linking Syria and Lebanon".
"The army is intensifying its strikes against the terrorist hideouts," a correspondent for the channel on the ground said, using the government's term to refer to rebels.
He reported "fierce fighting between the army and terrorist groups including Al-Nusra Front," the Syrian Al-Qaeda affiliate.
The Syrian Observatory for Human Rights said a Kuwaiti commander in the Al-Qaeda-linked group known as Abu Azzam al-Kuwaiti was killed in Friday's fighting.
It identified him as the number two Al-Nusra commander in the Qalamun region, where Yabrud lies.
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He had helped negotiate the prisoner swap that saw rebels release more than a dozen Christian nuns earlier this week.
The Observatory said the fighting was centred on the eastern entrance to Yabrud.
"There is fierce resistance by rebels led by Al-Nusra Front, which is trying to defend the town," Observatory director Rami Abdel Rahman said.
The Observatory, which relies on a network of activists and other contacts inside Syria, said regime helicopters were dropping explosives-filled barrels on the outskirts of Yabrud.
Battle-hardened Hezbollah guerrillas from Lebanon were fighting inside the town, it said.
After a month of aerial bombing and combat around the town, Hezbollah and Syrian troops have captured all the hills overlooking it.
On Friday, a military source told AFP that troops had entered Yabrud and "advanced along the town's main street" as rebels fled towards a village to the south.
Al-Nusra admitted that "one position" had fallen, "causing brother fighters to fall back to rear bases," but said reinforcements were on the way.
Hezbollah aims to sever rebel supply lines to the Sunni town of Arsal across the border in eastern Lebanon.
It charged that car bombs used to attack it inside Lebanon were loaded with explosives in Yabrud and then driven via Arsal to their targets.