Rebels fighting Syrian President Bashar al-Assad's forces in Aleppo have promised a counter-attack after losing ground earlier and residents fled in cars crammed with belongings during a lull in fighting.
The rebels were pushed back from the Salaheddin district on Thursday by troops seeking to reestablish control over Syria's largest city and its economic hub - a crucial arena in a struggle which the United Nations said would have no winner.
"I have about 60 men positioned strategically at the frontline and we are preparing a new attack today," said Abu Jamil, a rebel commander, saying sniper fire in Salaheddine had prevented his men from retrieving a comrade's body for two days.
Reuters journalists saw residents streaming out of Aleppo, seizing on a calm spell to pack vehicles with mattresses, fridges and toys. At least two air force planes flew overhead.
Random shooting echoed from inside Salaheddine, a former rebel stronghold that controls access to Aleppo from the south, and an unmanned drone aircraft buzzed directly overhead.
Some residents of the shattered neighbourhood slipped back to try to salvage possessions, despite army snipers lurking there. Two civilians were hit by gunfire in nearby streets.
One, apparently shot in the buttocks, was dragged off the street by rebels and treated by medics before being taken to a field clinic. A second man was wounded in the back and arm. Blood soaked through the sleeve of his yellow jacket and his face was contorted in pain as rescuers put him in a vehicle.
Assad is fighting to crush a rebellion that aims to end his family's four decades in charge of Syria. A member of the country's Alawite minority, Assad is engaged in an all-consuming fight with mostly Sunni Muslim foes who Damascus says are backed by Sunni-led states such as Saudi Arabia, Qatar and Turkey.
Though sympathetic to the rebels, neither these countries nor Western powers have intervened militarily. Russia and China have blocked any U.N. Security Council action against Syria.
Iran, Syria's closest foreign ally, called for "serious and inclusive" talks between the government and opposition at a meeting of states sympathetic to Assad in Tehran on Thursday.
"There will be no winner in Syria," U.N. Secretary General Ban Ki-moon said in a message to the conference. "Now, we face the grim possibility of long-term civil war destroying Syria's rich tapestry of interwoven communities."
Diplomats said veteran Algerian diplomat Lakhdar Brahimi could be named next week to replace the U.N.-Arab League envoy to Syria, Kofi Annan, who quit in frustration at the deadlock among veto-wielding powers at the United Nations.
Britain said on Friday it would increase non-lethal aid to Syria's opposition, including the rebel Free Syrian Army.
Foreign Secretary William Hague wrote in the Times newspaper that he had also instructed a senior diplomat to give Assad's foes "a tough message that they must observe human rights standards, whatever horrors are perpetrated by the regime".
Hague said the extra money for non-lethal aid totalled 5 million pounds ($7.8 million) and was separate from Britain's existing humanitarian programmes in Syria.
"This is not taking sides in a civil war," Hague wrote of the contacts with the opposition. "The risk of total disorder and a power vacuum is so great that we must build relationships now with those who may govern Syria in the future."
Assad's offensive in Aleppo follows a successful drive to expel rebels from parts of Damascus they had seized after a bomb blast killed four of his senior aides on July 18.
His grip on the country has been eroded and his authority was further shaken by his prime minister's defection this week.
FIGHT TO THE FINISH
Assad on Thursday appointed Wael al-Halki, a Sunni, to replace Riyad Hijab who had spent only two months in the job before making a dramatic escape across the border to Jordan.
But the Syrian leader appears determined to fight on, whatever the cost in human lives and destruction.
Assad's forces have been using heavy artillery and air power to subdue rebel-held areas. Reuters journalists saw a fighter jet diving and firing rockets over Tel Rifaat, 35 km (20 miles) north of Aleppo on Thursday, causing villagers to flee in panic. But large areas of Syria have fallen out of Assad's control.
Aleppo has been pounded by artillery for days. A rebel commander said on Thursday that 250 people had been killed in recent days in the Salaheddine district.
But as yet, there has been no sign of the infantry advance required for Assad to take full control of the city.
Rebel commander Abu Furat al-Garabolsy told Reuters one reason could be faltering morale among Assad's troops, but said the military might also be delaying a full-scale ground assault to tire rebels with bombardment and deplete their ammunition.
Growing numbers of civilians are fleeing the fighting in Aleppo and elsewhere. Nearly 150,000 Syrian refugees have been registered in Turkey, Jordan, Lebanon and Iraq since the conflict began 17 months ago, the United Nations said on Friday.
The total includes 50,227 recorded in Turkey, where more than 6,000 Syrians arrived this week alone, it said.
"There certainly in the past week has been a sharp increase in the numbers arriving in Turkey, and there many of the people are coming from Aleppo and surrounding villages," said Adrian Edwards, spokesman of the UNHCR refugee agency.