Syria rebuffed a UN truce plan that would see the east of Aleppo temporarily under opposition rule.
Syrian government forces and allied fighters advanced quickly inside rebel-held Aleppo today, pressing an offensive in defiance of international concern for the fate of the city and its civilians.
The recapture of the rebel-held east, which fell from government control in 2012, would be the regime's most significant victory in the conflict.
The international community appeared unlikely to halt the government's advance, despite expressing outrage about civilian deaths and the targeting of hospitals and rescue worker facilities in the east.
Rebel forces have steadily lost ground since Moscow, a key backer of President Bashar al-Assad, intervened to bolster his government last year.
The Syrian Observatory for Human Rights, a Britain-based monitor of the war, said Monday that government forces backed by Iranian and Russian troops and fighters from Lebanon's Hezbollah had captured the eastern part of the Masakan Hanano neighbourhood.
"It is the most important advance inside the eastern neighbourhoods that the regime has made so far," said Observatory director Rami Abdel Rahman.
"If they take control of Masakan Hanano, the regime will have line of fire control over several rebel-held neighbourhoods and will be able to cut off the northern parts of rebel-held Aleppo from the rest of the opposition-held districts."
Mr Abdel Rahman said the advance had both strategic and symbolic significance, because Masakan Hanano was the first neighbourhood to fall to rebels in 2012.
Aleppo recapture 'matter of time'Syria's Al-Watan daily, which is close to the government, described the neighbourhood as the "biggest and most important stronghold of the gunmen" in Aleppo.
On Sunday, Damascus rebuffed a UN truce plan for Aleppo that would see the east of the city temporarily administered by the opposition, saying it would "reward terrorists".
Once Syria's economic powerhouse, Aleppo has been ravaged by the conflict that began with anti-government protests in March 2011.
But the new assault could spark a fresh humanitarian catastrophe, the UN's Syria envoy has warned, prompting an exodus among the 250,000 people who remain in the east, trapped under regime siege.
Government forces have pounded east Aleppo with air strikes, barrel bombs and artillery fire since Tuesday, in the latest phase of an operation the army announced in late September.
No aid has entered the east since government forces surrounded it in July, prompting food and fuel shortages in opposition-held neighbourhoods.
A European diplomat said the fall of east Aleppo appeared to be a matter of time.
"Now, it's just a question of how long they can hold on," the diplomat said, speaking on condition of anonymity.
"There is nothing to eat, no more hospitals and the bombardment is non-stop. They are under very strong pressure."
Backers of the opposition, including Washington, have shown little sign they will intervene, beyond criticising Damascus and its allies over civilian casualties.
'Humanitarian catastrophe'The Observatory says more than 100 people have been killed in east Aleppo since the regime's latest bombardment began Tuesday, with at least five civilians killed in ongoing bombing on Monday.
Rebels have also fired rockets onto government-held west Aleppo, killing 10 people including eight children on Sunday.
On Sunday, US President Barack Obama said he was "not optimistic about the short-term prospects in Syria".
"Once Russia and Iran made a decision to back Assad in a brutal air campaign... it was very hard to see a way in which even a trained and committed moderate opposition could hold its ground for long periods of time," he said.
And the UN's Syria envoy Staffan de Mistura left Damascus on Monday after the government rebuffed his plan for a truce in Aleppo.
The top diplomat floated a deal under which jihadist fighters would leave the city and the opposition would continue to administer the eastern districts, at least temporarily.
"We told him that we reject that completely," Syria's Foreign Minister Walid Muallem said Sunday after meeting Mr de Mistura in Damascus.
"The institutions of state must return to east Aleppo," he added.
Mr De Mistura warned that time was "running out" for eastern Aleppo, adding that there was concern about "an acceleration of military activities" in Aleppo and beyond.
"By Christmas... due to military intensification, you will have the virtual collapse of what is left in eastern Aleppo; you may have 200,000 people moving towards Turkey -- that would be a humanitarian catastrophe," he said.