By Erika Solomon and Mariam Karouny
BEIRUT, July 17 (Reuters) - Syrian rebels and government troops clashed in central Damascus for a third day in the fiercest fighting inside the capital since the revolt against President Bashar al-Assad erupted last year, but neither side appeared able to deliver a decisive blow.
Government troops also used helicopter gunships and artillery to target rebel fighters in the northern and southern outskirts and rebels said they had killed 70 security forces and pro-Assad militiamen known as shabbiha over the past 24 hours.
The encroachment of violence into the capital comes as United Nations envoy Kofi Annan visits Moscow to promote a peace plan for Syria. He will meet President Vladimir Putin on Tuesday, but Russia still appears resistant to Western calls for Moscow to increase pressure on Assad.
Video uploaded by opposition activists showed Damascus buildings and shops that were set ablaze by what they said was rocket and artillery fire. One showed a grocer sweeping out the scorched contents of his shop as smoke still rose from the back.
"I couldn't sleep at all. There was shelling with artillery and helicopter gunships from midnight until 6 in the morning. They didn't stop firing for a single minute," said a Damascus resident, contacted from Beirut by telephone.
"They were using artillery, helicopter gunships and mortars. At dawn you could hear the call to prayer mixed with the sound of gunfire. Now we can hear clashes with heavy machinegun fire. Helicopters are hovering over the area."
Clashes continued in Midan district and artillery and rocket fire also hit the opposition area of Tadamon, on the outskirts of the capital, they said.
"DRAINING THE REGIME"
The government has said little about the unrest moving to the capital. State television reported on Monday that security forces were chasing "terrorist groups" hiding in some neighbourhoods in Damascus.
Opposition activists said clashes close to the seat of government showed that rebels were chipping away at state power in a capital once seen as Assad's impenetrable stronghold.
"When you turn your guns against the heart of Damascus, on Midan, you have lost the city," said Damascus-based activist Imad Moaz. "The rebels in the street have the support of families across Damascus."
One Free Syrian Army officer in Damascus said thousands of rebel fighters from the opposition centres of Idlib, Raqqa, Hama and Homs had moved to Damascus, but lacked firepower to deliver a decisive blow and were seeking instead to "drain the regime".
"We do not want to control Damascus because we know we will not be able to do it or to topple him, but what we want to do is to control a few areas that we will use as operation points," said the officer, who declined to be named.
Another senior rebel said Damascus was "in a state of general alert ... We are doing well but we can not announce anything yet. We cannot talk about seizing an area because the regime will then destroy it completely."
"It is too soon to talk about toppling him now."
While fighting raged in Damascus, a Turkish official said a Syrian brigadier general and several other military defectors were among 1,280 Syrians to have fled to Turkey overnight.
They were the latest in a steady stream of officers to join the revolt, and follow the defection of Syria's ambassador to Iraq last week and the escape from Syria by Manaf Tlas, a member of Assad's inner circle.
Underlining the depth of the crisis, neighbouring Iraq called on its citizens - many of whom had fled to escape Iraq's own sectarian bloodshed - to leave Syria because of the increase in violence.
Clashes and shelling in opposition areas continued across the country and the British-based Syrian Observatory for Human Rights, which has a network of activists across the country, said more than 150 people were killed on Monday.
Activist accounts are hard to verify because the government restricts access to international media.
With violence rising, the West wants Moscow to drop its support for Assad. Along with China, Moscow has vetoed action against the president at the U.N. Security Council. But before talks with Annan, Foreign Minister Sergei Lavrov signalled no change in Moscow's position.
Lavrov said Western efforts to pass a Security Council resolution, which would extend a U.N. monitoring mission in Syria and also include a threat of sanctions, contained "elements of blackmail". He called for support for Moscow's rival text, which does not call for sanctions.
"If our partners decide to block our resolution no matter what, then the U.N. mission will not have a mandate and will have to leave Syria. That would be a pity," he said.
The small, unarmed U.N. monitoring mission of about 300 is the only international military presence in Syria. It was brought in as part of a peace plan backed by Annan, but suspended due to rising violence in Syria. Activists say more than 17,000 people have died.
U.S. Secretary of State Hillary Clinton, interviewed by the BBC during a Middle East tour, said she hoped Moscow would open the way for a Yemen-style transition to avoid all-out civil war. Former Yemeni President Ali Abdullah Saleh stepped down in February after months of protests, in a U.S.-backed transfer of power brokered by Yemen's wealthy Gulf Arab neighbours.
"The international community has been more than ready to impose all kinds of pressure on the Assad regime," Clinton said.
"Unfortunately, we haven't been able to do that (tip the balance in the Syria conflict) and part of it is because the Russians are very clear: they don't want to give any opening for force that could be used."
Saying she had spoken to Annan before his Moscow trip, she said: "I hope he's able to persuade the Russians that there's a way forward that they should sign on to."
British Foreign Secretary William Hague, speaking after meeting Syrian refugees in Jordan, said his visit left him in no doubt "that a Chapter Seven resolution of the United Nations Security Council is required to mandate the implementation of Kofi Annan's peace (plan)".
Chapter Seven allows the 15-member council to authorise actions ranging from diplomatic and economic sanctions to military intervention. U.S. officials have said they are talking about sanctions on Syria, not military intervention.
"We will continue to argue for it over the course of the coming hours," he told a news conference in Amman.
What began as a protest movement in Syria, inspired by demonstrations in other Arab countries, has become an armed insurgency fighting against Assad's crackdown. The International Committee for the Red Cross now classifies the conflict as a civil war.
(Additional reporting by Khaled Yacoub Oweis in Amman, Oliver Holmes in Beirut and Jonathon Burch in Ankara, writing by Dominic Evans, editing by Philippa Fletcher)