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Syrian troops loyal to President Bashar al-Assad launched a broad offensive on Friday aimed at expelling rebels from the town of Adra, northeast of Damascus, state news agency SANA said.
The industrial town, the scene of fierce fighting for three days, is strategically located on a main road into the capital.
The fighting follows a string of army victories against opposition fighters, particularly in Damascus province, where rebel positions have been under siege for more than a year.
"Our armed forces started this morning to stage a broad offensive on Adra, to assault the terrorists' positions after encircling the area," said a military source, quoted by SANA.
Assad's regime has branded all rebels and dissidents as "terrorists" ever since the uprising began as a series of peaceful protests in March 2011.
Friday's fighting comes two days after Islamist rebels attacked security and army positions, as well as pro-regime militiamen, in Adra.
At least 18 pro-regime fighters were killed in the ensuing clashes.
Between Wednesday and Thursday, at least 15 civilians -- mostly Alawites, members of the same religious sect as Assad -- were also killed in the rebel attack on the town.
Adra is home to Sunnis, Alawites, Druze and Christians.
Residents told AFP that 10 of the civilians killed had been targeted because of their cooperation with the regime.
On Friday, the Observatory said a Shiite man and his family were killed when he threw a bomb at rebels trying to break into his home in Adra.
"He, along with his wife, brother and child died, as did two rebels," Observatory director Rami Abdel Rahman told AFP.
Most of the country's Alawites -- whose religion is an offshoot of Shiite Islam -- support Assad.
The army, backed by Lebanon's Hezbollah and Iraqi Shiite fighters, has made a series of advances on several fronts in recent weeks, strengthening its hand ahead of UN-brokered peace talks planned for next month.