Hezbollah suffers big losses in Syria battle: activists By Khaled Yacoub Oweis and Dominic Evans AMMAN/BEIRUT (Reuters) - About 30 Lebanese Hezbollah fighters and 20 Syrian soldiers and militiamen loyal to President Bashar al-Assad have been killed in the fiercest fighting this year in the rebel stronghold of Qusair, Syrian activists said on Monday. Sunday's reported death toll was the highest for Hezbollah in a single day's conflict in Syria, highlighting the increasing intervention by the guerrilla group originally set up by Iran in the 1980s to fight Israeli occupation troops in south Lebanon. If confirmed, the Hezbollah losses also reflect the extent to which Syria is becoming a proxy conflict between Shi'ite Iran and Gulf Arab states such as Saudi Arabia and Qatar, which back Assad's mostly Sunni enemies. Western countries and Russia, an ally of Damascus, back opposing sides in this regional free-for-all which is also sucking in Israel. Three times this year Israeli planes have bombed presumed Iranian weapons destined for Hezbollah. 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 its raids targeted Iranian missiles stored near Damascus that it believed were awaiting delivery to Hezbollah, which fought a war with Israel in 2006. Syrian opposition sources and state media gave widely differing accounts of Sunday's ferocious clashes in Qusair, long used by rebels as a supply route from the nearby Lebanese border 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. 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. 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." 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. 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. Attacks by troops and militias loyal to Assad, who inherited power in Syria from his father in 2000, have put rebels 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. 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 and Giles Elgood