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Syria’s President Bashar al-Assad, centre,  performs prayers for Eid al-Adha, at al-Afram Mosque in Damascus Oct. 26, 2012, in this photograph released by Syria’s national news agency SANA.Sana/Reuters

Dozens of people were killed or wounded in a car bomb attack in southern Damascus, the Syrian Observatory for Human Rights said, marring a ceasefire that began Friday.

"The explosion of a booby-trapped car outside the Omar bin Khattab mosque in the area known as Shorta in the Daf Shawk district killed and wounded dozens of people," the Britain-based rights watchdog said.

The state news agency SANA earlier reported casualties in the explosion that came on the first day of the temporary ceasefire agreed to by both government forces and the main rebel group.

"A terrorist car bomb attack in... the neighbourhood of Daf Shawk has caused casualties and significant material damage," SANA reported.

The Observatory said ambulances flocked to the scene of the explosion which also destroyed several houses in the area.

The attack comes as the regime and the rebels agreed to observe a ceasefire from Friday morning during the four-day Muslim holiday of Eid al-Adha.

The ceasefire had been brokered by UN and Arab League peace envoy Lakhdar Brahimi, but both sides had pledged to respond if attacked.

Jihadist group Al-Nosra Front, which has claimed it carried out deadly rebel attacks in recent months, has categorically rejected any truce.

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