BEIRUT -- Syrian rebels fired grenades at tanks and troops while regime armor shelled Damascus neighborhoods Monday, July 16, sending terrified families fleeing the most sustained and widespread fighting in the capital since the start of the uprising 16 months ago.

Fierce clashes nearly encircled the heavily guarded capital as rebels seeking to overthrow President Bashar Assad pushed the civil war that has been building in Syria's impoverished provinces closer to the seat of power.

While the clashes were focused in neighborhoods in the city's southwest, for many of its 4 million people the violence brought close to home the strife that has scarred other Syrian cities.

In high-end downtown cafes frequented by the business and government elite bound to the Assad regime, customers watched as smoke billowed on the horizon and the boom of government shells reverberated in the distance.

"Without a doubt, this is all anyone is talking about today," a Damascus activist who gave his name as Noor Bitar said via Skype. "The sounds of war are clear throughout the city. They are bouncing off the buildings."

Syria's violence has grown increasingly bloody in recent months as the uprising has morphed from a peaceful protest movement seeking political change into an insurgency seeking to topple the regime.

Anti-regime activists say more than 17,000 people have been killed. The government says it has lost more than 4,000 security officers; it does not provide numbers

of civilian dead.

International diplomacy has failed to stop the violence, and world powers remain divided over who is responsible and how to stop it. The U.S. and many Western nations have called on Assad to leave power; Russia, China and Iran have stood by the regime.

On Monday, Russian Foreign Minister Sergey Lavrov accused the West of using blackmail to secure a U.N. Security Council resolution that could allow the use of force in Syria.

International envoy Kofi Annan, who has made little progress in brokering a political solution in Syria, met Russian leaders in Moscow on Monday. The meeting -- the latest in Annan's efforts to save his faltering peace plan -- comes a day after the conflict crossed an important symbolic threshold, with the international Red Cross formally declaring it a civil war, a status with implications for potential war crimes prosecutions.

Monday's fighting suggested that deep cracks were appearing in the tightly controlled facade of calm that has insulated Damascus from violence throughout the uprising.

Damascus -- and Syria's largest city, Aleppo -- are both home to elites who have benefited from close ties to Assad's regime, as well as merchant classes and minority groups who worry their status will suffer if Assad falls.

But for months, rebels have been gaining strength in poorer towns and cities in the Damascus countryside. Some activists suggested Monday that recent government crackdowns in those areas had pushed rebels into the city, where they were determined to strike at the heart of the regime.