Syrian rebels battled deep into the heart of Damascus today against government troops, who unleashed artillery and helicopter gunships on their own capital in retaliation for the assassination of Bashar al-Assad's closest security officials.
Diplomatic efforts that have long overtaken by events on the ground collapsed in disarray when Russia and China vetoed a UN Security Council resolution that would have imposed sanctions on Syrian authorities unless they stop using heavy weapons.
Washington said the council had "failed utterly".
The 16-month conflict - already in a climactic phase with rebels battling their way into the centre of the capital - has been completely transformed by a bomb that killed top members of Mr Assad's inner circle yesterday.
Mr Assad's powerful brother-in-law, his defence minister and a top general were killed, while the head of intelligence and the interior minister were wounded in the attack on a crisis meeting inside a security headquarters.
Mr Assad's own failure to appear in public in the next 24 hours - he was shown at last today in television pictures of the swearing in of a replacement for his slain defence minister - compounded the sense of his power eroding.
A woman who visited the neighbourhood of Tadamon, a scene of heavy fighting, said a police station was destroyed.
"I saw five charred bodies strewn across the street," she told Reuters by telephone. "Seven police cars were torched ... some mosques in Damascus are calling on loudspeakers which shelters are available for people who have fled."
Residents said a heavy onslaught of security force shelling and firing from helicopters went on through the night and continued today in Damascus.
Some reported explosions in the capital's troubled northeastern and southern districts.
A witness said rebels attacked the main police headquarters in Damascus.
"Gunfire has been intense for the past hour. It is now dying down but the streets around the police command remain empty," said a resident of Qanawat, an old central district where the Damascus Province police headquarters is located.
Other parts of the city were paralysed. Homes and shops were shuttered as Damascenes feared violence. Lebanese officials said refugees were pouring across the frontier. A security source said 20,000 Syrians had crossed.
International diplomacy has been ineffective throughout the crisis, with Western
countries condemning Mr Assad but lacking the stomach for the sort of robust intervention that saw Nato bombers help blast Libya's Muammar Gadafy from power last year.
Today's failed UN Security Council resolution, which would have extended a small, unarmed UN monitoring mission, was the third that has been vetoed by Russia and China.
The US ambassdor to the United Nations, Susan Rice, said the Security Council had "failed utterly", and Washington would look outside the body for ways "to bring pressure to bear on the Assad regime and to deliver assistance to those in need".
"The United States has not, and will not, pin its policy on an unarmed observer mission that is deployed in the midst of such widespread violence and that cannot count on even the most minimal support of this Security Council.
"Britain proposed a new four-paragraph resolution that would extend the mission for another 30 days, that could be voted on later today, diplomats said.
The monitoring mission's fate is unclear with its mandate expiring in two days. Kofi Annan, the international mediator behind a peace plan, said he was disappointed.
Most attention is now on the streets. Experts say the next few days will be critical in showing how well the government can recover from the double blow of losing its top security officials and their image of untouchable might.
"Everyone is looking now at how well Assad can maintain the command structure. The killings yesterday were a huge blow, but not fatal," said a Western diplomat following Syria.Western officials fear civil war could spill across borders.
Areas of Damascus without fighting were largely deserted. Residents said the roads to many southern districts where fighting was heaviest were closed or peppered with
checkpoints.
Syrian TV flashed a warning on its screen, telling residents gunmen disguised in Republican Guard uniforms were spreading through Damascus "planning to commit crimes and attack people".
Activists said real Republican Guard forces were in the Midan district. "We tapped into their walkie-talkies ... we are afraid of a massacre," activist Samir al-Shami
said."Everyone in the neighbourhood is arming themselves. Some with machineguns, some with shotguns. Some even just with
knives," one resident near Midan said.
"I can't even tell you what is going on outside because I've shuttered the windows and
locked the doors. I just hear every now and then the gunfire, it's like it's in the room," said another resident near Midan reached by telephone.
People fleeing violent areas began searching for safe havens, some even taking refuge in the marble courtyards of the ancient Umayyad Mosque in Damascus's historic Old City.
"We tried to find cheap hotels but all of them were full with other people who fled. So we came here to the mosque and said look, we have nowhere to go, nowhere to sleep," one woman in the group told a resident who toured the area,
The bombing yesterday seemed part of a coordinated assault on the capital that has escalated since the start of the week. Rebels call it the "liberation of Damascus" after
months of fierce clashes that activists say have killed 17,000 people.
A security source said the bomber who struck inside the security headquarters was a bodyguard for Mr Assad's inner circle. Anti-Assad groups claimed responsibility.
UN secretary general Ban Ki-moon condemned the Damascus blast and expressed grave concern over the use of heavy weapons.
"Time is of the essence," he said. “The Syrian people have suffered for too long. The bloodshed must end now."
While fighting rages in Damascus, clashes and shelling have also continued elsewhere across the country.Rebels said they had "liberated" the town of Azaz in northern Aleppo province, bordering Turkey.
Activists also published video of the town of Talbiseh, in central Homs province, being sprayed with gunfire from helicopters above.
Fighting also erupted near the Syrian-Israeli frontier, and Israel promptly responded saying it would not accept refugees.
"In the event of the regime's downfall, which could happen... (Israeli forces) here are alert and ready, and if we have to stop waves of refugees, we will stop them," defence minister Ehud Barak said.
Agencies