"Our forces have begun the final phase of encircling the capital, Damascus," said militant commander Hassan Abdel Ghani, with the armed group alliance that launched the offensive.

The defence ministry flatly denied the army had fled positions near the city.

"There is no truth to news claiming our armed forces, present in all areas of the Damascus countryside, have withdrawn," it said.

Earlier, a war monitor and Abdel Ghani said armed groups were within 20 kilometres of Damascus as Syria's army fell back in the face of the offensive gathering even more momentum.

The Syria Observatory for Human Rights said Syria's army had ceded more key ground, losing control of all of southern Daraa province and evacuating posts in Quneitra, near the Israel-occupied Golan Heights.

The monitor said Syria's army was also pulling out of towns as little as 10 kilometres (six miles) from Damascus.

Abdel Ghani said earlier that "our forces were able to control the Saasaa (security) branch in the Damascus countryside. The advance towards the capital continues."

Air strikes and shelling by Syria's army and their ally Russia killed at least seven civilians near the city of Homs, as the army sought to slow the militant advance there.

The astounding rebel gains have brought the militant group Hayat Tahrir al-Sham (HTS) and its allies to the doorstep of President Bashar al-Assad's seat of power, just over a week into a renewed offensive in a conflict that had long seemed frozen.

On the ground, Syria's army said Saturday it was redeploying in the south, where according to the Observatory, the government had lost control of the key city of Daraa, the cradle of the country's 2011 uprising.

In the central Homs area, a key passage to the seat of power in Damascus, the Observatory, said the Syrian army had brought "large reinforcements" and stopped the militants' advance.

An army statement carried by Syrian state media said that army forces were "redeploying and repositioning" in two southern provinces, including Daraa.

But both the Observatory and militants said Saturday that Syria's army no longer controlled any of the province.

While Aleppo and Hama were seized by HTS-led militants, Daraa was taken by local armed groups, according to the Britain-based monitor.

Early Saturday, Syria's army said it was "beginning to regain control in Homs and Hama provinces".

*This story was edited by Ahram Online.