Updated at 10:25 a.m. ET
(CBS/AP) BEIRUT - Rare gunbattles between security forces and rebels broke out Monday in an upscale Damascus neighborhood where embassies are located and senior officials live, one of the most serious confrontations in the tightly controlled capital since the anti-government uprising began a year ago. At least three people were killed.
The clash was a show of force by the opposition fighters, who recently suffered several major setbacks when they were driven out of strongholds in the northern city of Idlib and the central city of Homs. It demonstrated that they can strike at the heavily guarded heart of the capital.
The Britain-based Syrian Observatory for Human Rights, which has a network of activists throughout Syria, said 18 of Assad's troops were wounded in the clashes. It described the clashes "as the most violent of its kind and closest to security centers in Damascus since the revolution began."
Damascus has been largely free of the daily shootings and deaths reported across the country since the uprising against President Bashar Assad began. But the capital has witnessed several major bombings targeting government security buildings, most recently on Saturday.
The government blames "terrorists" for the bombings but the opposition says that the regime itself may be carrying them out to discredit the uprising. The U.S. has suggested al Qaeda may be entering the fray in Syria.
The state-run news agency SANA reported that Monday's fighting broke out when security forces stormed an apartment used as a hideout by an "armed terrorist" group in the upscale Mazzeh neighborhood.
The report said the forces killed two of the gunmen and arrested the third while a member of the security forces was killed.
Rami Abdul-Rahman, who heads the Syrian Observatory for Human Rights, gave an account of the same clash. He said several "armed groups of defectors" came from one of the suburbs of the capital and fired a rocket-propelled grenade at the house of an army brigadier general. They then entered a building where they were chased by security forces.
It was not clear if the general was hurt, he said.
One resident of the western Mazzeh district, who asked not to be named, told CBS News there was near continuous gunfire from around midnight to 6:00 a.m. "with at least 15 explosions."
"It was quite a bad night. I thought some people were trying to invade the area. There was continuous gunshot and heavy explosions," another resident said on condition of anonymity.
One resident of the neighborhood told the Associated Press that the clash was close to the Swiss embassy and the home of Maj. Gen. Assef Shawkat, the deputy chief of staff for security affairs, who is married to Assad's sister.
Mazzeh is home to affluent Syrians of different sects live and is the first Damascus neighborhoods that people coming from Lebanon reach. It is about a mile from a military airport.
Armed rebels are active in Damascus suburbs and satellite towns but rarely venture into the heart of the capital, where Assad's troops are deployed in force.
An activist in the capital said the clashes were near the Political Security Directorate building. He said the clashes were followed by raids by security forces, who were searching for the attackers.
The Local Coordination Committees activist group reported a heavy presence of security troops as well as pro-government gunmen known as shabiha in Mazzeh. It said many police vehicles were patrolling the area.
The rebel Free Syrian Army, which includes thousands of army defectors, has claimed responsibility in the past for attacks against regime forces.
The group's leader, Col. Riad al-Asaad, refused to comment on the fighting in Damascus when contacted by The Associated Press by telephone.
"This is a sensitive military matter that we cannot comment about," he said from Turkey.
On Saturday, three suicide bombings in Damascus killed 27 people. Two of them also targeted government security buildings.
On Sunday, an explosion killed two and wounded 30 in the northern city of Aleppo, Syria's largest.
The U.N. says more than 8,000 people have been killed in the yearlong uprising.
The Observatory said troops shelled the central village of Qalaat al-Madiq in central Hama province heavily damaging two homes. It added that troops stormed the northern village of Ebdita and set about 60 homes on fire.
The group said gunmen opened fire at a car in the northern province of Idlib killing an army lieutenant colonel and wounding two other members of the military.