Rebels fighting Syrian President Bashar al-Assad's forces in Aleppo said they were preparing a new attack on Friday and residents used a tenuous lull in the fighting to flee in cars crammed with possessions.
The rebels had been pushed back on Thursday by government forces 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 in Aleppo, where much of the fighting has raged in Saleheddine, a district on the city's southern approaches.
"One of my men is dead and inside Salaheddine. It's been two days and I haven't been able to get his body out because the sniper fire is so heavy," Abu Jamil said.
Reuters journalists saw residents streaming out of Aleppo, making the most of a calm spell to pack their vehicles with mattresses, fridges and toys and leave. At least two air force planes flew overhead.
Mr. 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 UN 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 Mr. Assad in Tehran on Thursday.
"There will be no winner in Syria," UN Secretary General Ban Ki-moon said in a statement read by a UN representative 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 UN-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 Mr. Assad's foes "a tough message that they must observe human rights standards, whatever horrors are perpetrated by the regime".
He said Britain's non-lethal aid to the opposition included medical, communications and water purification equipment and portable power generators.
"This is not taking sides in a civil war," Mr. 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."
Mr. 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.
Mr. 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.
Mr. 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 kilometres north of Aleppo on Thursday, causing villagers to flee in panic. But large areas of Syria have fallen out of Mr. 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.