With the uprising now in its 16th month, Assad told his Cabinet on Tuesday that Syria was in a "real situation of war".
"When one is in a state of war, all our policies and capabilities must be used to secure victory," he said according to the official SANA news agency.
Turkey said it had issued fresh rules of engagement to its army in response to the shooting down by Syria of one of its fighter jet last Friday.
A senior official travelling with US secretary of state Hillary Clinton said a Geneva conference on the crisis planned for this weekend was threatened by Russia's refusal to consider Assad's departure.
Across the country, the violence continued with at least 116 people killed on Tuesday according to the Syrian Observatory for Human Rights which said 68 civilians, 41 soldiers and seven rebels had lost their lives.
The fighting drew closer to the capital with clashes breaking out on Tuesday in the suburbs of Damascus between rebel forces and Syrian army units, around elite Republican Guard posts, the London-based Observatory said.
"Violent clashes are taking place around positions of the Republican Guard in Qudsaya and Al-Hama," Observatory head Rami Abdel Rahman said in Beirut.
It was the first time that artillery had been used "so close to the capital", he added.
"This development is important because it's the heaviest fighting in the area and close to the heart of the capital."
Abu Omar, a spokesperson for activists in the Damascus region, said all communication had been cut off in and around Al-Hama and Qudsaya.
Regime forces had "stormed the areas with tanks", he said via Skype. He also spoke of a "massacre" but gave no further details.
The official SANA news agency reported that government forces had clashed with "armed terrorist groups" in Al-Hama, killing dozens and arresting others.
Turkish Prime Minister Recep Tayyip Erdogan moved to denounce Syria's downing of its Phantom F4 fighter jet in far more aggressive terms than his initial, cautious statements over the weekend.
"This is a hostile act … a heinous attack," he said, adding that the military's standing orders had been adjusted accordingly.
"The rules of engagement of the Turkish Armed Forces have changed given this new development," he said.
Erdogan warned that any security or military risk posed by Syria on the Turkish border would be "considered a threat and treated as a military target".
"This latest development shows the Assad regime has become a clear and imminent threat to the security of Turkey, as well as for its own people," he added.
Damascus has defended the downing of the jet, saying it was a response to "a gross violation" of its sovereignty as the jet had entered Syrian airspace.
Appealing for calm
But Nato condemned the action after a meeting on the incident that had been called by Turkey, a member of the alliance.
"It is another example of the Syrian authorities' disregard for international norms, peace and security, and human life," Nato chief Anders Fogh Rasmussen said. The jet's two pilots are still missing.
Russia appealed for calm.
"We believe it is important that the incident is not viewed as a provocation or an intentional action, and that it does not lead to destabilising the situation," said a Russian foreign ministry statement.
Washington rejected a Russian proposal for Iran to take part in a planned international conference on Syria in Geneva on Saturday.
"It is better to involve Iran in the settlement [of the Syrian crisis]," Russian President Vladimir Putin told reporters in Jordan. "In any case it would complicate the process [if Iran is ignored]."
State department spokesperson Victoria Nuland told reporters in Washington the US did not think Iran could make a useful contribution given its support for the Damascus regime.
State department officials have also said that Clinton will not attend the meeting unless all parties first agree on the need for political change in Syria.
A senior official travelling with Clinton said the Geneva conference was threatened by Russia's refusal to consider Assad's departure but that a deal might yet be done.
"The sticking point is a clear agreement that there needs to be a political transition," the official said on Tuesday.
Amnesty International has denounced the Syrian regime for the torture and killing of three medics.
"The discovery of the charred and mutilated bodies of three young medical workers a week after their arrest in Aleppo city is yet further evidence of the Syrian government forces' appalling disregard for the sanctity of the role of medical workers," it said. – Sapa-AFP