* Aircraft resume assault on biggest city
* Turkey's Erdogan says he "cannot remain a spectator"
* Battle for Aleppo seen as potential turning point
By Erika Solomon
TAL RIFAAT, Syria, July 28 (Reuters) - Military helicopters pounded a rebel-held district of Aleppo on Saturday and armoured units positioned themselves for an onslaught that could determine the fate of Syria's biggest city, opposition sources said.
Turkey, once a friend but now a fierce critic of the Syrian government, joined growing diplomatic pressure on President Bashar al-Assad, calling for international steps to deal with the military build-up.
The Syrian Observatory for Human Rights, an opposition group which collects information on the 16-month-old uprising against Assad, reported helicopter attacks on the central Salaheddine district of Aleppo and fighting elsewhere in the city.
"Helicopters are participating in clashes at the entrance of Salaheddine district and bombarding it," the group said in an emailed statement. "There are also violent clashes at the entrances to Sakhour district."
One opposition activist said he had seen tanks and armoured carriers heading for Salaheddine.
On the approaches to Aleppo from the north many villagers were still shopping or tending their fields. But fighters from the rebel Free Syrian Army (FSA) were also in evidence, while a military helicopter clattered overhead in the distance.
One man in his forties, carrying his family on a motorcycle, said he was fleeing the fighting in Aleppo and heading to the town of Azaz near the Turkish border.
"We are living in a war zone," he told Reuters. "I and my relatives are just going back and back and forth, trying to stay away from the fighting. We left Aleppo when we saw smoke and helicopters firing."
On the road south from the Turkish border to Aleppo rebel soldiers had set up checkpoints bearing the sign: "This is an FSA checkpoint. May God protect you."
The battle for the city of 2.5 million people is seen as a crucial test for a government that has committed major military resources to retaining control of its two main power centres, Aleppo and the capital Damascus.
While neither side has managed to gain the upper hand, the outcome of the uprising is being watched anxiously in the region and beyond, amid fears that sectarian conflict could spread to neighbouring countries.
Military experts believe that while Assad's more powerful military will overcome the rebels in Aleppo and other major cities, it risks loss of control in the countryside because the loyalty of large sections of the army is in doubt.
"Assad's forces are likely to achieve a tactical victory that will represent a setback to opposition forces and allows the regime to demonstrate its military dominance," said analyst Ayham Kamel of the Eurasia Group, adding however that the rebels were getting stronger while the military was on the wane.
Three rebel fighters were killed in clashes before dawn on Saturday in Aleppo, the Observatory said. It said 160 people were reported killed in Syria on Friday, adding to an overall death toll of around 18,000 since the uprising began.
Video footage provided by the Observatory showed smoke rising over apartment blocks in the city into a hazy sky on Saturday. The sound of sporadic gunfire could be clearly heard.
Fighting was reported in other towns across Syria: Deraaa, the cradle of the revolution, Homs, the scene of some of the bloodiest combat, and Hama, where a revolt against Assad's father in the early 1980s was suppressed with thousands of deaths.
At least 10 people were killed on Saturday when Syrian security forces went into Maadameyat al-Sham near Damascus, the Observatory said.
TURKEY CALLS FOR ACTION
Turkish Prime Minister Tayyip Erdogan said late on Friday that international institutions needed to work together to address the military assault on Aleppo and Assad's threat to use chemical weapons against external enemies.
"There is a build-up in Aleppo, and the recent statements with respect to the use of weapons of mass destruction are actions that we cannot remain an observer or spectator to," he said at a news conference in London with British Prime Minister David Cameron.
"Steps need to be taken jointly within the United Nations Security Council, the Organisation of Islamic Countries, the Arab League, and we must work together to try to overcome the situation," he said.
Cameron said Britain and Turkey were concerned that Assad's government was about to carry out some "some truly appalling acts around and in the city of Aleppo".
Russia said international support for Syrian rebels would lead to "more blood" and the government could not be expected to willingly give in to its opponents.
Foreign Minister Sergei Lavrov, whose country has vetoed three U.N. Security Council resolutions intended to increase pressure on Assad, said Western and Arab nations should exert more influence on rebels to stop fighting.
Russia also said it would not allow searches of Russian-flagged ships under new European Union sanctions governing vessels suspected of carrying weapons to Syria.
U.N. rights chief Navi Pillay urged both Syrian government forces and rebels on Friday to spare civilians in Aleppo, voicing deep concern at the "likelihood of an imminent major confrontation" in the city reminiscent of other deadly assaults.
United Nations Secretary-General Ban Ki-moon said he was deeply concerned about reports that Syria could use chemical weapons and demanded that the government should state it would not use them "under any circumstances".
But the White House said such a promise from the Syrian president was "certainly not enough" given Assad had paid only lip service to a U.N.-backed peace plan.
"Assad's word is not worth very much," White House spokesman Jay Carney said. "Any use of those weapons, any failure to safeguard those stockpiles would be a very serious transgression that would result in those responsible being held accountable."
In stating this week that it would not use chemical weapons against its own people, but might do so against external threats, Syria caused major international concern about its stockpiles of non-conventional weapons.
The increase in fighting in Aleppo follows a bomb attack on July 18 that killed Assad's defence minister and three other top officials in Damascus, a development that led some analysts to speculate that the government's grip was slipping.
Since then, Assad's forces have mounted a strong counter-attack against rebels in Damasacus as well as concentrating forces for an expected assault on Aleppo.