BEIRUT (Reuters) - Syria faces growing economic sanctions and condemnation over what the United Nations calls "gross human rights violations," but President Bashar al-Assad shows no sign of buckling under pressure to end his military crackdown on popular unrest.
State television broadcast pro-Assad rallies "supporting national unity and rejecting foreign interference," after the Arab League imposed sanctions on Sunday.
The European Union weighed on Monday, further tightening the financial screws on Damascus for its "brutality and unwillingness to change course." The EU and United States jointly urged Syria to end violence, permit peaceful democratic transition, and allow in human rights observers.
Assad's Foreign Minister Walid al-Moualem hit back, lambasting the Arab League for "a declaration of economic war" that he said had closed the door to resolving the crisis.
"Sanctions are a two-way street," Moualem told a televised news conference. "I am not warning here, but we will defend the interests of our people."
In Geneva, a United Nations commission of inquiry said Syrian military and security forces had committed crimes against humanity including murder, torture and rape, for which Assad and his government bore direct responsibility.
It demanded an end to "gross human rights violations" and the release of those rounded up in mass arrests since March by Syrian forces quashing pro-democracy demonstrations.
More than 3,500 people have been killed in eight months, according to the United Nations.
EU foreign policy chief Catherine Ashton said the European Union was calling for a special session of the UN Human Rights Council on the situation in Syria, "given the gravity of the situation and the urgency for the international community to respond."
Syria's close trading partners Lebanon and Iraq rejected the Arab League measures, whose economic impact could be less severe than intended, analysts said.
"We do not agree with these sanctions and we will not go along with them," said Lebanese Foreign Minister Adnan Mansour.
The Arab League meanwhile appealed once more to Damascus, offering "a review of all of the measures" if Syria dropped its opposition to an Arab plan to end the crackdown.
Anti-Assad activists said eight civilians were killed on Monday in the province of Homs, which has seen some of the worst violence this month.
In an apparent political concession, which protesters have been demanding for months, Moualem said Syria planned to drop a constitutional clause which designates Assad's Baath Party as the leading party.
The revised constitution foresees "multi-party" politics with "no place for discrimination between parties," he said.
The Arab League sanctions hit banking, finance, investment and official travel but stop short of a full trade embargo.
"The sanctions are still economic but if there is no movement on the part of Syria then we have a responsibility as human beings to stop the killings," said Sheikh Hamad bin Jassim al-Thani of Qatar, the League's point man on Syria.
"Power is not worth anything when a ruler kills his people."
The president of the Union of Arab Banks, a division of the Arab League, said the sanctions would hit Syria's central bank, which has "big deposits" in the region, especially the Gulf.
Moualem said 95 percent of the targeted money had already been withdrawn beyond the reach of sanctions.
Along with peaceful protests, some of Assad's opponents are fighting back. Army defectors are grouped loosely under the banner of a Syrian Free Army and more insurgent attacks on loyalist troops have been reported in the last few weeks.
Arab nations wanted to avert a repeat of what happened in Libya, where a U.N. Security Council resolution led to NATO air strikes. Sheikh Hamad warned fellow Arabs that the West could intervene in Syria if it felt the League was not serious.
British Foreign Secretary William Hague said the Arab League sanctions demonstrated that "the regime's repeated failure to deliver on its promises will not be ignored."
France said it wanted Syria's powerful and critical neighbor Turkey to join an EU foreign ministers' conference to discuss further measures. Paris has proposed a secure humanitarian corridor linking Syria to Turkey.
One Western diplomat said Assad could, for now, count on support from China and Russia at the United Nations. But they may change position if he intensifies the crackdown and if the Arab League campaigns for international intervention.
China and Russia have oil concessions in Syria. Moscow also has a naval repair base on Syria's Mediterranean coast and announced on Monday that it was sending warships there, in an apparent display of determination to defend its interests.
"The sanctions are likely to lose Assad support among those in Syria who have been waiting to see whether he will be able to turn things around, such as merchants who could now see their businesses take more hits," the diplomat said.
Syrian officials blame the violence on armed groups targeting civilians. Government security forces say 1,100 of their members have been killed.
Assad, who inherited power from his father in 2000, said in an interview this month that he would continue the crackdown and blamed the unrest on outside pressure to "subjugate Syria."
(Additional reporting by Laila Bassam in Beirut, Khaled Yacoub Oweis in Amman, David Brunnstrom and Justyna Pawlak in Brussels and Stephanie Nebehay in Geneva; Writing by Douglas Hamilton; Editing by Peter Graff)