Armoured personnel carriers have been deployed in areas of Damascus, Syrian activists say, with clashes spreading on a second day of fighting.
The activists said troops backed by armoured vehicles had entered the Midan district to try to dislodge rebels.
Witnesses say this appears to be the biggest military deployment in the capital in the 16-month uprising.
Meanwhile, Russia said Western attempts to get Moscow to discuss sanctions contained "elements of blackmail".
'Our turn now'
Activists said armoured troop carriers had taken up positions on the main roads in Midan, which is a mainly Sunni district.
The Syrian Observatory for Human Rights said armour had not previously been deployed in Midan.
Its director, Rami Abdel Rahman, told Agence France-Presse: "Before, the security forces were deployed to suppress protests. Now, we have army troops engaged in combat."
He added: "[It has] never been this intense."
One resident, who lives in the south of the city, told the BBC's Newshour there was a lot of tension, with people scared and nervous, and it was becoming difficult to travel.
He said: "It's mainly in the southern parts of the city which are effectively besieged at the moment. There were very few people on the streets, just totally different from how the city is normally.
"The feeling, among people around me, is that it's our turn now. We are really feeling this. That this is the final fight, building up to who wins control of the regime."
One activist told AFP the army was trying to storm Midan from two sides, adding: "There are many injured and some killed. We need blood donations."
Another Syria activist, Mustafa Osso, told Associated Press the main road to Damascus International Airport in the south had briefly been closed.
Two days of fighting have also seen clashes in the Tadhamon, Jobar and Kfar Sousa districts.
A spokesman for the rebel Free Syrian Army, Ahmed al-Khatib, told AFP: "Midan and Tadhamon are out of the army's control. The army... are shelling from the outside, and clashes on the edges of the neighbourhoods continue."
Video footage on social media websites purported to show fighting in Kfar Sousa and Midan, with black smoke and the sound of gunfire.
It also showed a vehicle ablaze that activists said had been carrying pro-government shabiha militiamen.
However, the footage cannot be verified. News reports from Syria are difficult to confirm as it severely restricts journalists' freedom of movement.
The pro-government al-Watan newspaper said "terrorist groups" were seeking to launch "the great battle" for the capital, but in its headline it said: "You will never get Damascus."
'Elements of blackmail'
Meanwhile diplomatic moves are continuing ahead of Friday, the deadline for the end of the UN observer mission's mandate in Syria.
Russian Foreign Minister Sergei Lavrov said the West had threatened to end the mission if Moscow opposed its draft resolution, which threatens more sanctions.
Mr Lavrov said the attempts contained "elements of blackmail".
Moscow has circulated its own draft resolution calling for the extension of the mandate but without a threat of sanctions.
Russia has strong ties with Syria and has vetoed foreign intervention calls.
It was "not right" to say that pressure should only be brought on the government of President Bashar al-Assad and not the opposition to end the conflict, Mr Lavrov said.
"We do not support Assad," he said. "We support what has been agreed by all sides."
He said it was unrealistic to expect Russia to persuade Mr Assad to step down.
UN and Arab League special envoy for Syria Kofi Annan arrived in Moscow on Monday for meetings with Mr Lavrov and Russian President Vladimir Putin.
Mr Annan is expected to urge Russia to put more pressure on Syria's leaders to begin a political transition.
UN Secretary General Ban Ki-moon is also expected to raise the Syrian issue with Chinese leaders when he arrives in Beijing for a China-Africa summit. China has joined Russia in vetoing several Western-backed UN draft resolutions.
Separately Morocco has become the latest of many countries in the region and around the world to expel its Syrian ambassador.
The country's foreign ministry said in a statement that Nabih Ismail had been declared persona non grata. Shortly afterwards Syria expelled Morocco's ambassador in Damascus.
Some 16,000 people are thought to have been killed since the uprising against Mr Assad's regime began in March 2011.