Syrian jets bombed rebel forces in an attempt to recapture a keenly contested district of Homs, as mortar shells slammed into a Damascus neighbourhood killing at least three people.
The army's retaliation came as Al-Qaeda claimed the killing of 48 Syrian soldiers on Iraqi territory last week.
On the diplomatic front, a top official of Syria's tolerated opposition met Russian Foreign Minister Sergei Lavrov to appeal for key Damascus ally Moscow to relent in its refusal to back calls on President Bashar al-Assad to step down.
In Brussels, European Union foreign ministers emerged from talks with UN-Arab League envoy Lakhdar Brahimi on the conflict which is about to enter its third year, divided over whether to arm the rebels or push for a political solution.
Rebels launched a surprise assault on Homs's Baba Amr at dawn on Sunday, hoping to take back the devastated neighbourhood which they lost to Assad's forces last year.
The regime responded with air strikes and shelling, and sent reinforcements to the city which was "completely sealed", the Syrian Observatory for Human Rights said.
"The army will at all costs hunt down the rebels even if it destroys the neighbourhood," Observatory chief Rami Abdel Rahman said.
"The regime cannot allow them to stay ... because the neighbourhood of Baba Amr is known as an (anti-regime) symbol in the international media."
Pro-government newspaper Al-Watan said "the army thwarted an attempt to infiltrate Baba Amr... inflicting an enormous loss of human life and weapons on the armed groups," which it said included the jihadist Al-Nusra Front.
Regime troops seized Baba Amr from rebels just over a year ago after a bloody month-long siege that left the district in ruins and claimed hundreds of lives, including those of two foreign journalists.
At least 90 people were killed on Monday in violence across the country, the Observatory said.
In the capital, rebels launched mortar attacks, killing at least three civilians in the south of Damascus and wounding 28 others, the state-run SANA news agency said.
Another four people were wounded in an attack on the Tishrin sports stadium in the city centre during a football match, a sports manager there told AFP.
In Brussels, UN envoy Brahimi insisted that "the military solution is out of the question", speaking after talks with the EU's 27 foreign ministers.
The ministers were sharply divided, with Britain, France and Italy tipping in favour of eventual military aid for the opposition, and Germany and others seeing that as too risky.
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In Geneva, a UN commission of inquiry on Syria called for direct access to the UN Security Council to make the case for referring crimes committed in the war-torn country to the International Criminal Court.
It also said the Damascus regime appeared to be using militias to carry out sometimes sectarian mass killings in Syria, where the UN says more than 70,000 people have been killed in two years of fighting.
Meanwhile Al-Qaeda front group the Islamic State of Iraq claimed responsibility for an attack on a convoy in western Iraq on March 4 that killed 48 Syrian soldiers and nine Iraqi guards.
The soldiers, who were wounded and received treatment in Iraq, were being transported through the western province of Anbar on their way back to Syria when the attack took place, according to the Iraqi defence ministry.
The United States condemned the attack as a "terrorist" assault.
"Any kind of attack like this, any kind of terrorism like this is something that we should condemn," State Department spokeswoman Victoria Nuland said on Monday.
She also renewed Washington's concerns about Al-Qaeda and its affiliates "trying to take advantage of the violence and chaos in Syria for their own ends, which are not in keeping with the desires of the Syrian people to live in a just and democratic society."
On the diplomatic front, Haytham Manna of the National Coordination Committee for Democratic Change -- an anti-Assad group tolerated by the regime as it opposes the armed uprising -- said the road to peace runs through Moscow.
"We have always said that a peaceful political solution goes through Moscow," said Manna.
Russia has vetoed three UN resolutions that would have punished the Assad regime for the violence and has said it views pressure on him to step down as undue foreign interference.
Israel's chief of staff Benny Gantz warned that "terrorist" groups fighting Assad's regime alongside other insurgents were "becoming stronger" and voiced concern that they could turn on Israel in the future.
"The situation in Syria has become exceptionally dangerous. The terrorist organisations are becoming stronger on the ground. Now they are fighting against Assad but in the future they could turn against us," Gantz said.
In recent months, there have been several instances of gunfire or mortar shells hitting the Israeli side of the Golan Heights, which Israel seized from Syria in 1967.
UN spokesman Martin Nesirky said the safety of UN observers in the Golan Heights was under "very active review" after a shooting in the hours following the release Saturday of 21 peacekeepers by Syrian rebels.
"Over the weekend there was an incident in which one post came under fire from two unidentified individuals," he told reporters.