Syria regime retakes town as clashes rage TROOPS have overrun a rebel town and are locked in a second day of fierce clashes around Damascus, as Islamic states urged Syria's regime and its foes to hold "serious" talks to end the bloodshed. Opposition leader Ahmed Moaz al-Khatib has offered to hold peace talks with Syria's Vice President Faruq al-Sharaa, but Damascus has so far ignored the initiative and intensified attacks on rebel bastions. US Defence Secretary Leon Panetta, meanwhile, admitted for the first time on Thursday that the Pentagon had backed proposals to arm the rebels, but the White House rejected the idea on fears of the risks involved, the New York Times reported. After a 16-day onslaught, troops retook Karnaz on the strategic Damascus-Aleppo highway, said Rami Abdel Rahman of the Syrian Observatory for Human Rights. The outgunned rebel "fighters withdrew from Karnaz, which they seized in December last year, after heavy fighting and regular forces regained control," he told AFP. Clashes and heavy shelling rocked rebel strongholds around Damascus on the second day of an army offensive the Observatory said had killed at least 64 people on Wednesday. Mortar rounds killed six civilians in the northeastern district of Qaboon, among at least 92 people who died in nationwide violence on Thursday, according to a preliminary toll from the watchdog. "The army is determined to crush terrorism around the capital and big cities, and over the past several days it has launched a qualitative operation and killed dozens of terrorists who dreamt of attacking and entering Damascus," pro-regime newspaper Al-Watan wrote. The Observatory, which relies on a network of sources for its information, also reported regime shelling and clashes along a southern highway of the capital. On the outskirts of the city, the Observatory said troops pounded rebel positions across the east and in the south, and that clashes erupted to the northeast. These areas are among the strongest bastions of the rebellion against President Bashar al-Assad's regime, which is battling to suppress a revolt the UN says has killed more than 60,000 people. Farther to the northwest, the army shelled areas near Zabadani, an activist told AFP, adding many of those hurt had fled violence elsewhere in Damascus province. "We think the army is hitting areas that are home to displaced people as a way to pressure the rebels into stopping their advances," said the activist who declined to be identified. The offer for peace talks by Khatib, who heads the umbrella opposition National Coalition, was welcomed by the US and the Arab League, but Assad's regime has so far ignored the initiative and key opposition faction the Syrian National Council has flatly rejected it. Khatib has stepped up the pressure to engage in talks by setting the regime a deadline of Sunday to free all women held in prisons. The Organisation of Islamic Co-operation, at the end of a two-day summit in Cairo, called for "serious dialogue" between the Coalition and regime officials open to political change and without blood on their hands. "The Syrian government is primarily responsible for the violence," the 57-member OIC said in a final declaration that urged the UN Security Council to "assume its responsibilities to end the violence and bloodshed." The summit was being held in the absence of Syria which the OIC suspended in August over the regime's bloody crackdown on democracy protests.