A two-hour gun battle erupted in a Damascus neighbourhood in the early hours on Monday between Syrian security forces and insurgents near senior officials' homes.
The violent clash erupted after soldiers stormed a rebel hideout in the Mazzeh neighbourhood, according to a report in state media.
It said that two insurgents and one soldier were killed and a third insurgent arrested.
The Britain-based Syrian Observatory for Human Rights claimed that 18 soldiers had been wounded in the clashes.
It described the gun battle "as the most violent of its kind and closest to security centres in Damascus since the revolution began."
Rebel Free Syrian Army commander Colonel Riad al-Asaad refused to comment on the fighting in Damascus.
"This is a sensitive military matter," he said from Turkey.
Three suicide bombings targeting government buildings in Damascus killed 27 people on Saturday.
And an explosion on Sunday killed two and wounded 30 in Aleppo.
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