BEIRUT: Syrian rebels made advances Tuesday in a fierce battle for control of a Palestinian camp in southern Damascus that forced refugees to flee, residents and activists say.

President Bashar al-Assad's forces carried out air raids on the eastern and southern outskirts of the capital, killing three civilians, and clashes also erupted near the airport road, said the Syrian Observatory for Human Rights.

Fighting had rocked the Yarmuk camp during the night as the insurgents backed by some Palestinian fighters launched an offensive to push out a pro-regime Palestinian faction.

Explosions could be heard in Yarmuk, the battle front dividing troops and rebels struck by unprecedented air strikes that killed eight civilians at the weekend.

One resident reported seeing hundreds of fighters of the rebel Free Syrian Army from neighbouring districts inside the camp, while the army was nowhere in sight.

The mosques of the camp broadcast an army ultimatum giving the 150,000 residents until 1000 GMT to leave their homes, he told AFP.

"Some have decided to comply, but others chose to stay," the resident said.

Al-Watan newspaper reported the army was gearing up for a major assault on Yarmuk.

"Soldiers have massed in large numbers and are preparing a military operation to cleanse the camp," the pro-regime daily said.

An AFP journalist at the scene said army checkpoints were set up at the northern and southern entrances of the camp.

Soldiers were preventing anyone from entering, while dozens of families could be seen with suitcases in hand waiting to leave aboard pickup trucks.

Activist Abu al-Sakan said that while the army and pro-regime militia had retreated, the rebel fighters were braced for more clashes.

"We cannot say anyone has gained control yet, because the regime army is still in the first camp... There are clashes and at any moment the army could advance," he told AFP.

Palestinians in Syria, who are mainly Sunni Muslims, are divided over the uprising against the rule of President Assad, who is from the Alawite offshoot of Shiite Islam.

Abu al-Sakan said a group of Palestinian militants had defected to the rebel side.

Meanwhile, the population of the camp had halved by Tuesday, according to the United Nations agency for Palestinian refugees.

"Our conservative estimate would be that at least 50 percent of the people living in the Yarmuk suburb have left or are leaving, taking refuge in other parts of Damascus, UNRWA schools and facilities or leaving altogether," a spokesman said.

"As of yesterday, at least 2,600 had sought refuge in our facilities," Sami Mshasha added.

Many others have fled to neighbouring Lebanon.

A large number of buses and cars filled with Palestinians were waiting to enter Lebanon through the Masnaa border crossing on Tuesday, an AFP photographer said.

Others who arrived during the previous days and weeks were directed to Palestinian camps near the northern city of Tripoli or Sidon in the south, where a sit-in was held Tuesday outside the UNRWA office calling for urgent assistance.