The Islamic State group stormed the Yarmuk refugee camp in southern Damascus Wednesday, capturing large parts of the Palestinian haven and demonstrating for the first time its ability to attack Syria's capital.
IS militants entered the camp in a lightning assault, said Anwar Abdel Hadi, the Palestine Liberation Organisation's political affairs director in Damascus.
"Fighters from IS launched an assault this morning on Yarmuk and they took over the majority of the camp," he said, adding that fierce clashes were continuing inside.
"They reached the Palestinian hospital and 15th Street, which are in the centre of the camp," he added.
The Syrian Observatory for Human Rights said IS took control of a "large part" of Yarmuk during fighting with Palestinian groups also opposed to President Bashar al-Assad's regime.
The jihadists had infiltrated the camp from the rebel-held town of Hajar al-Aswad, according to the Britain-based monitoring group.
Yarmuk, located only six kilometres (3.7 miles) from downtown Damascus, was once a thriving home to 160,000 Palestinian refugees and Syrians.
But it has been devastated by fighting and a tight blockade imposed by the army nearly two years ago that created dire humanitarian conditions.
The camp, covering an area of just two square kilometres (less than a square mile), has seen its population dwindle to only about 18,000.
Last year, it witnessed scenes of desperation as thousands of people crammed into devastated streets to queue for food distributed by the UN Palestinian refugee agency.
Rebel fighters had withdrawn from Yarmuk in February 2014 under a deal that left only Palestinian anti-regime groups inside.
The siege has caused significant shortages of food, water and drugs at the camp.
IS, which declared a self-styled "caliphate" last year over large parts of Syria and Iraq under its control, has fought against the Assad regime as well as other rebel groups as it seeks to gain territory.
An activist in Yarmuk said IS launched the attack after some of its members were detained following the murder there of a leader of the Palestinian Islamist movement Hamas on Monday.
Elsewhere, a coalition of rebel fighters including Islamists attacked Syria's main border crossing with Jordan, known as the Nasib post, prompting the authorities in Amman to close it.
"Fierce fighting over the control of the Nasib border crossing with Jordan erupted early this morning between Islamists and rebels and regime forces, with the rebels putting the crossing under siege," said the Observatory.
The rebels had besieged the post and were being hit by barrel bombs and rocket fire from government forces.
Jordan's government said later that it had closed the crossing, leading to Syria's Daraa province, to both travellers and goods.
The closure was a "preventive measure to safeguard the lives and security of travellers due to the fighting underway on the other side of the border," Interior Minister Hussein Majali told AFP.
Rebels have been gaining territory in the southern province, cradle of the 2011 Arab Spring-inspired uprising against Assad that triggered the civil war.
Last week they seized full control of the ancient town of Bosra al-Sham, pushing pro-regime forces out after days of heavy fighting.
In January rebels -- including fighters from the Al-Qaeda affiliated Al-Nusra Front -- seized an important government army base in the province.
In other developments Wednesday, the army captured a strategic position in the rebel-held town of Zabadani, northwest of Damascus on the road to Beirut.
More than 215,000 people have been killed and more than half of the country's population has been displaced since the Syrian conflict erupted in March 2011.