President Bashar al-Assad said on Tuesday his regime has defeated the "conspiracy" against Syria, even as rebels overran a provincial capital and captured its governor in the biggest coup of their revolt.
Assad, in comments published in Lebanese newspaper Al-Akhbar, also said his opponents, backed by foreign powers, were "playing a game of survival" and that his forces had the upper hand on the battlefield.
The paper quoted unnamed politicians who met Assad in Damascus saying he appeared "very comfortable" with military developments in Syria and had pointed to "contradictions in the exiled opposition groups' stance... as proof of their failure".
Assad's regime refers to the revolt that broke out in March 2011 as a foreign-backed plot against the country.
His remarks were published a day after Syrian rebels overran the provincial capital of Raqa province in the north.
On Tuesday, the Observatory distributed a short amateur video filmed by rebels showing provincial governor Hassan Jalili, and Suleiman Suleiman, the ruling Baath party's secretary general for Raqa province, captured by rebels.
After insurgents took most of Raqa on Monday, warplanes bombarded the city the next day, said the Observatory.
Jihadists with Al-Nusra Front, an increasingly influential factor in Syria's conflict, fought alongside other rebel groups in the battle for the northern city.
Pro-regime newspaper Al-Watan described the takeover as "terrorism spreading in Raqa."
"The army and security services are fighting fierce battles in the city of Raqa where thousands of armed men have arrived" from the countryside, said Al-Watan.
"This city was one of the calmest (in Syria) and was considered a refuge for many Syrians who had fled their cities," the daily added.
"Armed men are looting homes as well as public and private institutions amidst the city's chaos."
Raqa was once home to 240,000 residents, but some 800,000 people forced to flee violence in other parts of Syria have sought shelter there since the start of the nearly two-year conflict.
In the latest fighting, while warplanes bombarded rebel enclaves in Homs, fresh clashes pitted rebels against troops in insurgent enclaves in the city in central Syria, said the Observatory.
An activist in the rebel-held Old City district of Homs, which has been under army siege for eight months, likened Tuesday's round of fighting to "a war of attrition".
"Everything in the Old City is burning. This is the army's fiercest onslaught on Homs since the outbreak of the revolt," Abu Bilal told AFP via the Internet.
Some 70,000 people have died in the Syrian conflict, the UN says, with at least 126 people killed across the country on Tuesday alone, according to the Observatory.
On a visit to neighbouring Turkey on Tuesday, Jordan's King Abdullah II called on the Syrian regime to move towards an "inclusive transition" to prevent the breakup of the war-torn country.
"Only an inclusive transition will stop sectarian conflict and avoid fragmentation of Syria," he said at a press conference with Turkish President Abdullah Gul, whose country has repeatedly called for Assad's ouster.
And in Doha, visiting US Secretary of State John Kerry expressed confidence that weapons being supplied by Gulf countries to Syrian rebels were reaching the "right people," amid fears they are falling into the hands of jihadists.
"We did discuss the question of the ability to try to guarantee (that the weapons) are going to the right people and to the moderate Syrian opposition coalition," he added at a press conference with Qatari Prime Minister Sheikh Hamad bin Jassem Al-Thani.
However, he repeated comments on Monday about the impossibility of ensuring that, saying "there is no guarantee that one weapon or another might not fall into the wrong hands."
Sheikh Hamad warned that if the conflict is not resolved soon, "we will find extremist parties taking part in it," accusing Assad's regime of "using this issue" to gain support against his opponents.
However, he said: "I am optimistic that the international community has started to work in a way by which the Syrian people would achieve victory faster. The terrorist is Bashar. He is the one killing his people."
He said "there is a change now in the international and American stance... They are now discussing weapons."
In Damascus, meanwhile, Deputy Foreign Minister Faisal Muqdad handed over to the Russian ambassador a German journalist, Billy Six, who was later transferred to his country's embassy in Beirut.
A spokesman for his employers, Junge Freiheit weekly, said Six had been reporting from Syria since August 2012 and the paper was informed of his capture by Syrian troops shortly after Christmas.