* Western powers reluctant to supply weapons
* Rebels close in on Damascus
* Obama announces U.S. will recognise Syrian opposition coalition
By Samia Nakhoul and Khaled Yacoub Oweis
MARRAKECH, Morocco, Dec 12 (Reuters) - Major powers are set to give Syria's opposition full political recognition on Wednesday but not the weapons that rebel fighters need to counter President Bashar al-Assad's superior firepower as they gain ground across the country.
The "Friends of Syria," a loose forum of governments opposed to Assad, will meet in the Moroccan city of Marrakech as the rebels intensify their push on Damascus and signs grow that the 20-month uprising may be nearing a tipping point.
President Barack Obama announced on U.S. television on the eve of the Marrakech talks that Washington would now recognise the newly formed coalition of opposition groups as Syria's legitimate representative, which could intensify the pressure for Assad to relinquish power.
"We've made a decision that the Syrian Opposition Coalition is now inclusive enough, is reflective and representative enough of the Syrian population, that we consider them the legitimate representative of the Syrian people in opposition to the Assad regime," Obama said in an interview with ABC News.
However, his announcement stopped short of authorizing the United States to supply weapons to Syria's opposition - something Obama has steadfastly refused to do.
"All indications on the ground signal the end of the regime of Bashar al-Assad," leading opposition figure Riad Seif told Reuters. "We expect this meeting to fully recognise the coalition as the sole representative of the Syrian people."
Fighting is moving closer to Assad's residence in the centre of Damascus. Rebels clashed with his forces on Monday in a district close to the Rawda palace, exchanging fire as pedestrians ducked for cover.
The mainly Sunni Muslim rebels have scored a string of victories against Assad's forces, many of them from his Alawite religious minority. There is little evidence that the government is regaining control, residents say.
Assad's forces are using warplanes and heavy artillery to try to halt further advances by rebels, many of them die-hard Islamists. Opposition leaders say they need heavy weapons to sustain the momentum and change the military equation in a conflict which has killed 40,000 people since March 2011.
The two sides battled near Damascus airport, about 25 km (15 miles) southeast of the palace. The fighting is part of a broader confrontation between Assad's troops and the rebels who hold a near continuous arc of territory from the east to the southwest of his power base.
Damascus residents are facing power cuts and food shortages as they try to prepare for winter. In central Syria an attack on a village killed or injured as many as 200 members of Assad's Alawite minority sect, activists said, but it was unclear who was behind the assault.
Assad's political and armed opponents, dogged by splits and rivalries throughout their battle to end his family's 42-year rule, have established a more unified political opposition and military command, hoping to win international support.
France, Britain, Turkey and the Gulf states have already granted the formal recognition. The European Union, in a meeting on Monday, moved a step closer towards recognition and the United States has suggested it could also endorse the coalition.
But the opposition also needs weapons. "We are telling the international community that we don't want their military intervention but we want them to supply us with a developed anti-aircraft defence systems," Seif said. "The Syrian people can finish off the battle within weeks if we get this support."
Little in the way of direct military or financial support is expected to be channelled to the coalition at the Morocco meeting, partly because it lacks the ability to act as a provisional government and because Western powers are still wary of backing Islamist fighters in the rebel ranks.
'JOCKEYING FOR POSITION'
A diplomat attending the meeting said there had been much "jockeying for position within the coalition without addressing the main political issues," including making arrangements to work with Syria's Alawite, Kurdish and Christian minorities and creating a framework for transitional justice.
As delegates arrived in Marrakech, the United States announced it had designated the radical Islamist rebel group Jabhat al-Nusra - which has claimed responsibility for dozens of car bombs and fights alongside other rebel Syrian brigades - as a terrorist organisation.
Farouk Tayfour, deputy leader of the Syrian Sunni Muslim Brotherhood, said Washington had made a "very wrong and hasty decision".
The fighting has driven hundreds of thousands of Syrians into neighbouring countries and the United Nations High Commission for Refugees said more than half a million were either registered or awaiting registration in the region.
U.S. Secretary of State Hillary Clinton will miss the Marrakech meeting but is sending her deputy William Burns to accelerate the process of helping the opposition.
U.S. arms supplies for rebels remain off the table for now, reflecting Washington's wariness of the rising influence of radical Islamists and reluctance to intervene directly in the conflict.
While Western powers are holding back, Qatar and Saudi Arabia are arming and financing the Muslim Brotherhood and other militant groups while Iran is bankrolling Assad.
Western governments, observers say, could tip the balance of power by channelling anti-aircraft and tank weapons to selected rebel units - not those with an Islamist agenda.
Many opposition figures said the "Friends of Syria" meeting is falling short of their hopes for military help.
"Diplomatic recognition is not enough. We need military support. A transitional phase has started and we need the means to defend the liberated parts of Syria from regime strikes," coalition member Abdelbasset Sida told Reuters.
"We are nearing the end. Battles in Damascus are drawing very near to the inner sanctum of the regime and I do not expect Bashar to last for long," he said.
Syrian opposition campaigner Walid al-Bunni said that after many meetings, the "Friends of Syria" had to show willingness to depose Assad and end the bloody conflict.
"Every week of delay means the destruction of villages and parts of cities and towns and the killing of an average of 1,000 people," said Bunni, one of a few members of the coalition not allied with the Brotherhood.
"Recognition of the coalition will help but it will not end the crisis. There needs to be real international will to stand by the Syrian people and get rid them of this dictatorship."