Rebels pressed their guerrilla fight to topple Syria's regime deeper into the capital, ambushing troops and attacking police stations as thousands of terrified civilians fled to Lebanon and Iraq to escape some of the worst violence of the 16-month conflict.
The two-day death toll was more than 470 people, marking some of the deadliest of the uprising.
The United Nations refugee agency said between 8,500 and 30,000 Syrians had entered Lebanon in the past 48 hours and thousands of Iraqis have also returned home, a bitter trip for many who fled to Syria from their own country's civil war.
In Damascus, Syrian forces recaptured one battle-scarred neighbourhood and proudly showed reporters the dead bodies of rebel fighters lying in rubble-strewn streets. But rebels said they withdrew to expand their guerrilla war, pointing to the difficulty both sides will have in achieving victory in Damascus, the central bastion of President Bashar Assad's rule.
Fighting has flared across Syria this week, as battles have ravaged Damascus neighbourhoods, death tolls have skyrocketed, border crossings have fallen to rebel fighters and a rebel bomb attack killed top members of Assad's regime.
Assad's national security chief, Gen Hisham Ikhtiyar, died on Friday from wounds sustained in the bombing on Wednesday that killed three others, including the defence minister and Assad's brother-in-law. All were key to the government's efforts to stamp out the insurgency.
The fighting has shattered parts of Damascus, with rebels attacking at least two police stations and government troops pounding rebel districts with mortars, machine-guns and attack helicopters. The clashes echoed those seen elsewhere in Syria, with lightly-armed, disorganised rebels avoiding direct battles with better-equipped government troops while launching ambushes on their convoys and checkpoints. The regime, for its part, has deployed overwhelming firepower, shelling from afar and sending attack helicopters that rebel weapons can't reach.
More than 170 people were killed across Syria yesterday, including about 50 in Damascus, the British-based Syrian Observatory for Human Rights said, pushing the death toll over the past two days over 470. Activist claims and videos could not be independently verified. The Syrian government bars most media from working in the country.
In Geneva, the UN refugee agency said the fighting had caused a surge in the number of refugees fleeing the country. The group estimated earlier this week that some 120,000 Syrian refugees were in neighbouring countries and another million were displaced inside Syria.
On Thursday, Russia and China vetoed a resolution backed by key Western nations that would have imposed new sanctions on Assad's regime.