US President Barack Obama warned Syria on Monday that Washington will not tolerate any deployment of chemical weapons, as fighting raged from the north to the south of the country.

Obama put Bashar al-Assad's Syrian regime on notice that, while he had not ordered intervention "at this point," Washington is "monitoring the situation very carefully, and we have put together a range of contingency plans.

"There would be enormous consequences if we start seeing movement on the chemical weapons front or the use of chemical weapons... That would change my calculations significantly," he told reporters at a White House briefing.

The president added that the United States would regard any recourse by Damascus to its deadly arsenal as crossing what he dubbed a "red line."

Syria's admission in July that it has chemical weapons and could use them in case of any "external aggression" added a dangerous new dimension to a conflict which the new UN peace envoy already describes as civil war.

At least 131 more people were killed Monday, including two children in shelling in Daraa, the birthplace of the revolution, a watchdog said, as the United Nations brought an end to its troubled observer mission.

Lakhdar Brahimi, who has replaced Kofi Annan as the international point man for Syria, had warned Sunday that it was now a matter of stopping rather than avoiding civil war after 17 months of bloodshed.

"There are a lot of people who say that we must avoid civil war in Syria, me I believe that we are already there for some time now. What's necessary is to stop the civil war and that is not going to be easy," he said.

But Syria -- which insists it is fighting an insurgency by "armed terrorist groups" backed by the West, Gulf states and Turkey -- reacted angrily.

"To speak of civil war in Syria contradicts reality and is found only in the heads of conspirators," the foreign ministry said in a statement carried by the state SANA news agency.

This came as French President Francois Hollande bluntly told Brahimi at a meeting in Paris there "cannot be a political solution without the departure of Bashar al-Assad."

The Syrian Observatory for Human Rights, meanwhile, reported fierce fighting across the country on the second day of Eid al-Fitr, the holiday celebrated by Muslims around the world to mark the end of the holy month of Ramadan.

The Observatory said troops backed by helicopters also pounded several areas of Aleppo, including the local Baath party headquarters and a military tribunal in Syria's second city.

Warplanes and helicopters circled the city throughout the day, and reported heavy fighting in southwestern districts where the regime's military operation against rebels is focused.

"Where can we go, we don't have anywhere to go," lamented Tahani, 40, one of a group of women sheltering with children in the entrance of a house.

"In this situation having children is a curse. If it were just me, I wouldn't be afraid but I am always afraid for them."

Aleppo, the commercial capital, has emerged as the epicenter of the conflict since rebels seized large swathes of the city in a July offensive. Government officials have said its recapture will be the "mother of all battles."

The opposition Syrian National Council complained that government forces using combat helicopters, tanks and heavy artillery have carried out "savage" attacks on Herak, warning that food and medicines are running out.

Fighting also flared in southern parts of Damascus as the army battles persistent pockets of resistance despite claiming it retook most of the capital last month. In the province, 29 people were killed, half of them civilians.

UN observers wound up their troubled mission on Sunday amid a failure by world powers to agree how to respond to Assad's crackdown and bring peace to the strategic Middle East state.

Its operations were largely suspended in June and observer numbers cut back in the face of the mounting violence, as both sides violated a ceasefire that was meant to have been the cornerstone of Annan's plan for peace.

A total of 23,000 people have now been killed since March last year, according to the Observatory, while the UN puts the death toll at around 17,000.

The conflict has raised fears of a spillover into neighboring countries, which are sheltering several hundred thousand refugees who have fled the fighting.

Turkey warned it can handle no more than 100,000 refugees and has proposed setting up a UN buffer zone inside Syria to shelter them.

The United Nations has warned of a humanitarian crisis with more than one million people also displaced inside Syria and up to 2.5 million in need of aid.