The Organisation of Islamic Cooperation suspended Syria, saying the Muslim world "can no longer accept a regime that massacres its people", as 31 people were reported killed in an air strike.
Regime forces were also bombarding the key battleground city of Aleppo in the north, activists said, while Damascus was shaken by a bomb attack targeting a military headquarters and a firefight near the prime minister's office.
As the world's main Muslim grouping the 57-member OIC wound up a summit in the Saudi holy city of Mecca early Thursday, UN investigators said the Syrian regime had committed crimes against humanity, including the Houla massacre in May.
A statement issued at the end of the emergency OIC summit said participants had agreed on "the need to end immediately the acts of violence in Syria and to suspend that country from the OIC".
The final statement said there had been "deep concern at the massacres and inhuman acts suffered by the Syrian people".
OIC chief Ekmeleddin Ihsanoglu told a news conference the decision sent "a strong message from the Muslim world to the Syrian regime".
"This world can no longer accept a regime that massacres its people using planes, tanks and heavy artillery," he added.
The move was welcomed by the United States as sending a "strong message" to President Bashar al-Assad's regime.
"Today's action underscores the Assad regime's increasing international isolation and the widespread support for the Syrian people and their struggle for a democratic state that represents their aspirations and respects their human rights," US State Department spokeswoman Victoria Nuland said.
A report by the UN Commission of Inquiry said government forces and their militia allies committed crimes against humanity including murder and torture, while the rebels had also carried out war crimes, but on a lesser scale.
"The commission found reasonable grounds to believe that government forces and the shabiha had committed the crimes against humanity of murder and of torture, war crimes and gross violations of international human rights law and international humanitarian law," the UN report said.
It said they were responsible for the massacre in the central city of Houla in May when 108 civilians, including 49 children, were killed in a grisly attack that Assad himself had said was the work of "monsters".
Rebel fighters were however not spared in the probe, which found them guilty of war crimes, including murder, extrajudicial execution and torture.
In the north of Syria, activists and residents reported another atrocity by the regime, with at least 31 people including children killed in an air strike in Aazaz, a rebel bastion near the second city Aleppo.
"Bashar did this. God help us, these animals will kill us all," said one man, hoisting a bloodied arm from a pile of body parts on the pavement outside the local hospital.
The Syrian Observatory for Human Rights said 31 people were killed, including women and children, and another 200 wounded, warning the toll could rise.
"There are many people still trapped under the rubble," said Observatory director Rami Abdel Rahman. "The situation is horrific."
Dozens of residents were seen fleeing for nearby Turkey, many of them entire families carrying boxes of clothing and food on their heads.
In all at least 156 people were killed Wednesday in Syria, where more than 23,000 people have died since the uprising against the regime erupted in March 2011, said the Observatory.
In Damascus, the Free Syria Army claimed a bomb attack targeting a military headquarters near a hotel used by UN observers, saying it was a warning that it could strike any time at the very heart of the regime.
In July, another attack also claimed by the FSA killed four top security chiefs in a major body blow to the regime.
A gunbattle also erupted near the offices of new Prime Minister Wael al-Halqi, just a day after his predecessor Riad Hijab, the highest profile government figure to defect, said the regime had collapsed and only controlled 30 percent of the country.
And in a worrying development in neighbouring Lebanon, rioters blocked roads and dozens of Syrians were kidnapped and their shops vandalised in violence that triggered orders from Gulf nations for citizens to leave immediately.
Rioters set fire to tyres on the road to Beirut airport and closed the main highway to Syria after unconfirmed television reports said several Lebanese Shiite pilgrims kidnapped in Syria in May had been killed in the Aazaz attack.
Saudi Arabia, the United Arab Emirates and Qatar all issued warnings for their nationals to leave because of what the UAE foreign minister said was a "very dangerous" situation.
UN humanitarian chief Valerie Amos, who is due in Beirut Thursday after visiting Damascus, warned that the situation in Syria was getting worse, with the number of people in need possibly as high as 2.5 million.
The UN Security Council meets on Thursday to formally end the UN observer mission in Syria amid entrenched divisions between the major powers over the conflict-stricken country.
Russia and China hit out at western nations over Syria ahead of the meeting, which also comes as UN leader Ban Ki-moon struggles to persuade Algerian diplomat Lakhdar Brahimi to become the new international envoy on the conflict.
Russian Foreign Minister Sergei Lavrov accused Western states of fomenting violence by openly supporting the armed rebellion, comments rejected by the United States.
China, which along with Russia has blocked three UN resolutions on Syria, also accused Western powers of hampering efforts to end the conflict, as a senior Damascus envoy visited Beijing for talks.