A powerful car bomb exploded near the offices of Syria's ruling Baath party in central Damascus on Thursday, killing at least 31 people, wounding dozens and shattering buildings, media and a watchdog said.

The mid-morning blast, which rocked the city centre and sent thick smoke scudding across the skyline, came as Syria's opposition was meeting in Cairo to discuss proposals by its leader to hold conditional talks with Syria's regime.

Shortly after the blast, a nearby military headquarters came under mortar attack, state television said, without giving details.

The official SANA news agency said a "large number" of civilians were killed or wounded in what it described as a "terrorist attack", while the Syrian Observatory for Human Rights put the initial toll at 31 dead and dozens wounded.

Images of bloodied bodies lying on the ground and of blazing vehicles were broadcast by the official television channel Al-Ekhbariya, which said children were among the wounded, as the blast occurred near a school in Mazraa district.

A police official told AFP the car bomb exploded at the 16 November Square near the Al-Iman mosque, where the Baath party's head offices are located.

Ambulances sirens rang out, and machinegun fire was also heard.

Russian news agencies reported the windows of Russia's embassy in Damascus were blown out by the blast but none of its staff were hurt.

The explosion added urgency to the Cairo meeting of the main opposition National Coalition, where discussions according to a delegate were centered on an offer by the group's chief to hold direct talks with the Syrian regime.

"The agenda is long and among the issues to be discussed is the initiative of Ahmed Moaz al-Khatib," Khaled Nasser told AFP.

Coalition chief Khatib has offered to negotiate with officials of President Bashar al-Assad's regime who have no "blood on their hands" -- naming Vice President Faruq al-Sharaa as a possible pointman.

Assad's regime has said it is ready to negotiate with the opposition but without pre-conditions.

Khatib's initiative has been welcomed by the Arab League and the United States as well as by two of Syria's chief allies, Iran and Russia.

But the Syrian National Council, a key component of the Coalition, has rejected any possibility of dialogue until Assad steps down.

UN-Arab League peace envoy Lakhdar Brahimi, who on Wednesday agreed to extend his mission by six months, at the weekend urged support for Khatib's plan.

Holding talks "in one of the United Nations' headquarters between the opposition and an acceptable Syrian government delegation would be a start to exiting the dark tunnel," he said in Cairo.

Russia, which has long urged a negotiated end to the conflict, on Wednesday again called on the warring sides to halt their fighting and start talks, warning that seeking a military settlement risked mutual destruction.

"It's time to end this two-year conflict," Foreign Minister Sergei Lavrov said after a meeting with Arab League chief Nabil al-Arabi and other top Arab diplomats in Moscow.

"Neither side can allow itself to bet on a military settlement as this is a path to nowhere, a path to mutual destruction.

"There are signs of positive tendencies, signs of tendencies for dialogue both from the side of the government and the opposition," he added.

But Lavrov said it was up to the two sides to decide what kind of dialogue might take place and at what level.

"It is important that they do not come out with any conditions for each other and say that I am going to talk to this person but not that one."

The UN says at least 70,000 people have been killed in the near two-year conflict.

The violence frequently spills across Syria's borders, spiking already-simmering regional tensions.

In the latest incident, the rebel Free Syrian Army has accused Lebanon's Hezbollah militant group of shelling territory held by the insurgents, and issued a warning it would retaliate.

General Selim Idriss, the FSA chief of staff, told AFP on Wednesday that Hezbollah had long been taking part in hostilities in Syria, but had gone too far by shelling villages near Qusayr in Homs province from the Bekaa valley in Lebanon.

The commander said the rebels were giving Hezbollah a 48-hour deadline to stop the attacks and "as soon as the ultimatum ends, we will start responding to the sources of fire".

Hezbollah has repeatedly denied sending fighters into Syria, though its leader Hassan Nasrallah acknowledged in October 2012 that party members had fought Syrian rebels but said they were acting as individuals and not under the group's direction.