Damascus is a transit route for Arab fighters travelling to Iraq to fight with the insurgency. The United States has accused Syria of failing to stop fighters, but Syria's leaders insist they've increased military posts and patrols along their 370-mile border with Iraq, stopping thousands of would-be infiltrators.
"There are now some 1,000 non-Syrian suspected terrorists behind bars who have been stopped entering or leaving Iraq illegally," said Syria's Vice Foreign Minister Faisal Miqqdad.
"We have a zero tolerance for terrorism," he said, blaming the United States for failing to shoulder responsibility and secure the other side of the border.
The rehabilitation program, which was adopted last year, enlisted 60 state-backed clerics to counter radical teachings with moderate passages from the Quran, Islam's holy book. The government would not say whether the program was still underway.
"I was asked by the government last summer to talk to these people, to cleanse their minds from radical ideologies and try to fit them back into the Syrian society," Sheik Mohammad Habbash Habbash, one of the program counselors, told CBS News.
"I told them that there are restrictive rules in Islam for waging holy war. Jihad must be under the umbrella of the state and should be approved by one's parents," he said.
"My lectures to four different groups were on how Islam views jihad, how Islam forbids people to go for fighting if that was not under the directives of the ruler," said conservative sheikh Abdul Aziz Al-Khateeb, another program counselor.
"The state here is following this issue. It is keen that the people are educated enough in the right way so that they are not influenced by wrong teachings and corrupted ideals," he added.
Syria's secular authorities have always kept a tight lid on Islamic unrest. The pan-Arab Ba'ath party, which has ruled Syria since 1963 crushed an extremist movement in the 1980s after it launched a string of deadly attacks across the country.
But Syria, one of the most secular Arab countries, is now experiencing a dramatic religious resurgence that authorities cannot seem to get under control.
Syrian state television in November aired statements by men it said were Fatah al-Islam militants, admitting they had carried out a bomb attack in September that killed many civilians.
On September 27, a car packed with 440 pounds of explosives exploded near a Shiite shrine in the capital, killing 17 passers-by and wounding 14 others in one of the deadliest attacks in Syria in a dozen years.
Islam is a faith of many faces, from the Wahhabis to the Sufis, from Shiites to Sunnis. There are also the secular Muslims, and there are many in Syria, and then the militants under the command of extremists, as with the now-well-known groups plaguing Pakistan and Afghanistan.
But a new Islamic revivalism is evident among the hitherto moderates. The change is clearly fueled by anger over pictures of the occupation of Iraq and violence in the Palestinian territories, beamed into peoples' homes every day.
"Islam is filling a void left by the collapse of communism, the failure of pan-Arab nationalism and a general malaise that has left Arabs searching for identity," said Abdul Hadi Sabbagh, a well-known analyst and writer in Syria's ancient city of Aleppo.
The marketplace in Aleppo, in the north of Syria, now wears a distinct look of Islamic revivalism. Few had expected to see this in Syria.
Counselors from the rehabilitation program have said the prisoners captured here seemed broken, humiliated and angry — the perfect prey for militant recruiters.
Similar government-sponsored pilot programs are also being tried in Egypt, Saudi Arabia and Yemen. But Syrian officials were not available to comment on the issue.
"Do you know that Grand Mufti of Syria Sheikh Ahmad Hassoun has recently directed for the renovation of the Damascus Synagogue? Do you know that the Mufti has accompanied himself a Jewish Rabbi to one of the mosques and told worshippers we should always seek interfaith dialogue?" asked university professor Sami Moubayed.
"This is Syria's way of telling the world it is promoting a tolerant Islam. This kind of Islam, similar to that in Turkey, is one that can accommodate with the West, and helps to curb radicalism."
This story was filed by CBS News' George Baghdadi in Damascus.