BEIRUT (Reuters) - Syrian forces have retreated from a rebel-held town under a local ceasefire, residents said on Thursday, but deadly violence raged on elsewhere as a month-long mandate for Arab peace monitors in Syria was expiring.
Twenty people, including two army officers, were reported killed across Syria, adding to a death toll of more than 600 since the Arab League observers arrived.
An armed insurgency is taking hold in some areas, hardening what began 10 months ago as a mostly peaceful struggle against President Bashar al-Assad's authoritarian rule.
Residents of Zabadani said troops and tanks that had besieged the insurgent-controlled town had pulled back after a deal to end days of fighting, according to an opposition leader.
Dozens of armoured vehicles that had encircled Zabadani, a hill resort near the Lebanese border, withdrew to garrisons 8 km (5 miles) away, Kamal al-Labwani told Reuters.
The Arab League monitoring mandate was expiring on Thursday night, with Arab foreign ministers due to weigh their next move in Cairo on Sunday. They are at odds over how to respond to the turmoil in which thousands of people have been killed.
"They are in a big mess," a source close to the Cairo-based League said. "They are running out of options."
An Arab League source said this week Syria might let the monitors stay on, but without any broadening of their mandate.
The leader of Syria's Muslim Brotherhood said world powers should pile diplomatic pressure on Assad and set up a no-fly zone and "safe zones" to help the opposition.
"The international community should take the right position ... They should fully isolate this regime, pull out their ambassadors and expel the regime's ambassadors," Mohammad Shaqfa told Reuters in a telephone interview.
Assad, whose father crushed an armed Brotherhood revolt in 1982, says Syria is facing a foreign conspiracy that is using Islamist militants to destroy a bastion of Arab nationalism.
"The country is capable of overcoming the current conditions and building a strong Syria," Assad told a delegation calling itself the Arab People's Initiative for Fighting Foreign Intervention in Syria, the state news agency SANA reported.
The U.N. Security Council is split over Syria, with Russia declaring it will work with China to block any move to authorise military intervention.
Western powers have acknowledged that a Libya-style campaign in Syria would be fraught with danger, but want the council at least to condemn Assad's repression and impose sanctions.
Reliable casualty figures are hard to come by in Syria, where media access has been limited and the outside world has had to piece together a picture from the conflicting accounts of the parties to an inchoate and increasingly bloody struggle.
The opposition Syrian Observatory for Human Rights said 454 civilians had been killed since the Arab observers deployed on December 26 to verify whether an Arab peace plan was working.
It said 146 members of the security forces, including 27 who had deserted to the opposition, had also been killed. The Observatory's figures did not include 26 people who authorities said were killed by a suicide bomber in Damascus on January 6.
The British-based Observatory reported at least 18 more civilian deaths across Syria on Thursday and said an insurgent attack in Hama had killed an army brigadier and a lieutenant.
Asked if the Arab monitors had made a difference, Rami Abdul-Rahman, the name used by the Observatory's director, said: "Yes, in the first week, the number of deaths fell sharply. After that, no, the numbers rose."
The Avaaz advocacy group said 746 civilians had been killed over the past month, and it urged the Arab League to ask the Security Council to impose punitive measures against Assad.
"TREATED WITH CONTEMPT"
"Arab League observers have now observed Assad's brutality first hand," Avaaz director Ricken Patel said. "Their mission has been treated with contempt and failed on every objective."
The United Nations said on December 13 that security forces had killed more than 5,000 people in Syria since March. A week later Damascus said insurgents had killed 2,000 security personnel.
The Arab League suspended Syria and announced sanctions for its failure to comply with a November peace plan which required that it halt the bloodshed, withdraw military forces from the streets, free detainees, provide access to Arab monitors and the media, and open a political dialogue with opposition groups.
The unrest, combined with Western sanctions, has driven the value of the Syrian pound down by 50 percent on the black market, exchange dealers said.
Assad's foes say the Arab monitoring mission has only given Assad diplomatic cover to pursue a violent crackdown.
Some Arab countries, led by Qatar, which heads the League's committee on Syria, say the mission has failed. Qatar has even proposed sending in Arab troops, an idea opposed by Damascus and not endorsed by any other country in the 22-member League.
Iraq and Lebanon have said they will not enforce Arab sanctions on Syria, offering a trade lifeline to a country whose other neighbours are Turkey, Jordan and Israel.
European Union governments are expected on Monday to expand the list of people and Syrian companies and institutions targeted by EU sanctions, diplomats said in Brussels.