Syrian jets bombed rebel forces attempting to recapture a keenly contested district of third city Homs on Monday, as mortar shells slammed into a Damascus neighbourhood killing at least three people.
Al-Qaeda meanwhile claimed the killing of 48 government troops 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.
And in Brussels, European Union foreign ministers held talks with UN-Arab League envoy Lakhdar Brahimi on ways of stopping an "appalling" conflict about to enter its third year.
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.
Fighting raged through the night, with more air strikes on Monday morning.
"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 43 people were killed on Monday in violence across the country, according to the Observatory, including a woman and four children in the eastern Deir Ezzor region, as well as 21 rebels.
Rebels launched mortar attacks on the capital, with three civilians killed and 28 others wounded in a district of southern Damascus, state media reported.
"A mortar shell fired by terrorists fell behind a shop on Duwaliya road, killing three civilians and wounding 28 others," the SANA news agency said. Another shell slammed into nearby Bab Sharqi district causing further casualties.
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 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 said the Syria regime appeared to be using militias to carry out sometimes sectarian mass killings.
Al-Qaeda front group the Islamic State of Iraq meanwhile said in a statement on jihadist forums that it carried out an attack on a convoy in western Iraq 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 on March 4, according to the Iraqi defence ministry.
Baghdad has consistently avoided joining calls for the departure of Assad, saying it opposes arming either side and urging an end to the violence that has ravaged Syria for the past two years, leaving at least 70,000 people dead.
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 he thought the road to peace in Syria ran through Moscow.
"We have always said that a peaceful political solution goes through Moscow," Manna told Lavrov.
"A military solution is still being enforced on the ground. But the predominant majority of Syrians are convinced that a political solution is desirable, that it will save us and that it stands a real chance."
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.