By Khaled Yacoub Oweis and Dominic Evans
AMMAN/BEIRUT (Reuters) - Lebanese Hezbollah guerrillas have fought their biggest battle yet for Syria's beleaguered president, prompting international alarm that the civil war may spread and an urgent call for restraint from the United States.
About 30 Hezbollah fighters were killed on Sunday, Syrian activists said, along with 20 Syrian troops and militiamen loyal to President Bashar al-Assad during the fiercest fighting this year in the rebel stronghold of Qusair, near the Lebanon border.
That would be the highest daily loss for the Iranian-backed movement in Syria, highlighting how it is increasing its efforts to bolster Assad; it prompted U.S. President Barack Obama to voice his concern to his Lebanese counterpart, Michel Suleiman.
If confirmed, the Hezbollah losses reflect how Syria is becoming a proxy conflict between Shi'ite Iran and Arab states like Saudi Arabia and Qatar, which back Assad's mostly Sunni enemies. Dozens of dead in sectarian bombings in Iraq on Monday and killings in the Lebanese city of Tripoli compounded a sense of spreading regional confrontation.
Western powers and Russia back opposing sides in the cross-border Syrian free-for-all, which is also sucking in Israel - though Washington and its allies have fought shy of intervening militarily behind fractured and partly Islamist rebel forces.
The White House said Obama spoke to Lebanese President Suleiman and "stressed his concern about Hezbollah's active and growing role in Syria, fighting on behalf of the Assad regime, which is counter to the Lebanese government's policies". The Beirut government, however, has limited means to influence the politically and militarily powerful Shi'ite group.
The two leaders agreed "all parties should respect Lebanon's policy of disassociation from the conflict in Syria and avoid actions that will involve the Lebanese people in the conflict".
Israeli Prime Minister Benjamin Netanyahu said his country was "preparing for every scenario" in Syria and held out the prospect of more Israeli strikes on Syria to stop Hezbollah and other opponents of Israel obtaining advanced weapons.
Israel has not confirmed or denied reports by Western and Israeli intelligence sources that three raids this year targeted Iranian missiles near Damascus that it believed were awaiting delivery to Hezbollah, which fought a war with Israel in 2006.
FOG OF WAR
Syrian opposition sources and state media gave differing accounts of Sunday's clashes in Qusair, long used by rebels as a supply route from Lebanon to the provincial capital Homs.
Hezbollah has not commented but in Lebanon's Bekaa Valley on Monday several funeral processions could be seen. Pictures of dead fighters were plastered on to cars and mourners waved yellow Hezbollah flags. Several ambulances were seen on the main Bekaa Valley highway and residents said hospitals had appealed for blood to treat the wounded brought back to Lebanon.
The air and tank assault on the strategic town of 30,000 people appeared to be part of a campaign by Assad's forces to consolidate their grip on Damascus and secure links between the capital and government strongholds in the Alawite coastal heartland via the contested central city of Homs.
The government campaign has coincided with efforts by the United States and Russia, despite their differences on Syria, to organize peace talks to end a conflict now in its third year in which more than 80,000 people have been killed.
A total of 100 combatants from both sides were killed in Sunday's offensive, according to opposition sources, including the British-based Syrian Observatory for Human Rights. Such a death toll would indicate at least hundreds had taken part.
Troops have already retaken several villages around Qusair and have attacked increasingly isolated rebel units in Homs.
"If Qusair falls, God forbid, the opposition in Homs city will be in grave danger," said an activist who called himself Abu Jaafar al-Mugharbil.
State news agency SANA said the army had "restored security and stability to most Qusair neighborhoods" and was "chasing the remnants of the terrorists in the northern district".
Syrian television also showed footage of what it said was an Israeli military Jeep which it said the rebels had been using and which showed the extent of their foreign backing. An Israeli military spokeswoman said the vehicle was decommissioned a decade ago and dismissed the footage as "poor propaganda".
Opposition activists said rebels in Qusair, about 10 km (six miles) from the Lebanese border, had pushed back most of the attacking forces to their original positions in the east of the town and to the south on Sunday, destroying at least four Syrian army tanks and five light Hezbollah vehicles.
The Western-backed leadership of the Free Syrian Army, the loose umbrella group trying to oversee hundreds of disparate rebel brigades, said the Qusair fighters had thwarted Hezbollah with military operations it dubbed "Walls of Death".
Syrian government restrictions on access for independent media make it hard to verify such videos and accounts.
"NO DIALOGUE WITH TERRORISTS"
The fighting raged as Western nations are seeking to step up pressure on Assad - Britain and France want the European Union to allow arms deliveries to rebels - while preparing for the peace talks brokered by Russia and the United States next month.
British Foreign Secretary William Hague said "no option is off the table" over the possible arming of rebels if the Syrian government does not negotiate seriously at the proposed talks.
Russian Foreign Minister Sergei Lavrov, whose country has shielded Syria from U.N. Security Council action, said Syrian opposition representatives must take part without precondition, apparently referring to their demands for Assad's exit before they come to the table.
Assad has scorned the idea that the conference expected to convene in Geneva could end a war that is fuelling instability and deepening Sunni-Shi'ite rifts across the Middle East.
"They think a political conference will halt terrorists in the country. That is unrealistic," he told the Argentine newspaper Clarin, in a reference to Syria's mainly Sunni rebels.
Assad ruled out "dialogue with terrorists", but it was not clear from his remarks whether he would agree to send delegates to a conference that may in any case falter before it starts due to disagreements between its two main sponsors and their allies.
The fractured Syrian opposition is to discuss the proposed peace conference at a meeting due to start in Istanbul on Thursday, during which it will also appoint a new leadership.
Among divisive factors in the rebel camp is fundamentalist Islam, practiced by some fighters and opposed by others. In the latest Internet video from Syria to cause discomfort for rebels seeking Western backing, anti-Assad Islamists flogged two men they said had infringed a ban on marrying newly divorced women.
Attacks by troops and militias loyal to Assad, who inherited power in Syria from his father in 2000, have put rebel groups under pressure in several of their strongholds in recent weeks.
Assad, from Syria's minority Alawite sect, has been battling an uprising which began with peaceful protests in March 2011. His violent response eventually prompted rebels to take up arms.
Hezbollah has supported Assad throughout the crisis but for months denied reports it was fighting alongside Assad's troops.
The Syrian Observatory for Human Rights put the Hezbollah casualties on Sunday at 28 dead and more than 70 wounded, while 48 rebel fighters and four civilians were also killed.
Tareq Murei, an activist in Qusair, said six more people were killed on Monday as Syrian army artillery and Hezbollah rocket launchers bombarded rebel-held parts of the town.
Video footage purportedly showed a Syrian tank on fire at a street corner in the town. In another video a warplane was shown flying over the town amid the sound of explosions.
Lebanese security sources said at least 12 Hezbollah fighters were killed in Qusair on Sunday. Seven were to be buried in the Lebanese town of Baalbek and nearby villages on Monday, they said.
(Additional reporting by Erika Solomon in Hermel and Dan Williams in Jerusalem; Writing by Dominic Evans; Editing by Samia Nakhoul, Alistair Lyon, Giles Elgood and Alastair Macdonald)