The Islamic State of the Iraq and Levant (ISIL) group has seized control over western parts of the Yarmouk district in southern Damascus, inhabited mainly by Palestinian refugees, according to a senior Palestinian official, witnesses and an activist monitoring group.
Anwar Abdel Hadi, director of political affairs for the Palestine Liberation Organisation in Damascus, told the AFP news agency that "fighters from ISIL launched an assault this morning on Yarmouk and they took over the majority of the camp" on Wednesday.
The Syrian Observatory for Human Rights, a UK-based monitoring group, said ISIL was in control of a "large part" of the neighbourhood after fighting with Palestinian groups also opposed to President Bashar al-Assad's regime.
An activist in Yarmouk, who spoke on condition of anonymity, told Al Jazeera that ISIL fighters - from the neighbouring town of Hajr al-Aswad - stormed the western side of Yarmouk and seized areas from the Palestinian armed group Bait al Maqdis.
He added that fighting has been ongoing and denied reports that most of Yarmouk had been seized by ISIL.
"Parts of Yarmouk are being shelled, but it is unclear whether it is by regime forces or ISIL," he said. Smoke was reportedly seen rising from the area.
The Yarmouk resident claimed that one of the main reasons for the clashes relates to the recent arrest of ISIL fighters in the district who were accused of assassinating a leading figure of Bait al Maqdis.
Control over Yarmouk is still divided between Palestinian factions and Syrian armed groups, including Nusra Front, Ahrar al-Sham and other Free Syrian Army brigades.
Yarmouk was once a thriving area home to 160,000 Palestinian refugees and Syrians but has been caught up in the country's fighting and besieged by regime forces for more than a year.
About 18,000 residents are estimated to remain in the camp after many fled the fighting.
Syrian rebels had withdrawn from the camp in February 2014 under a deal that left only Palestinian anti-government groups inside.
The siege has caused significant shortages of food, water and drugs inside the camp.
ISIL, which has seized control of large parts of Syria and Iraq, has fought not only against the Assad regime but also against other rebel groups as it seeks to expand the territory under its control.
Jordan closes border
In a separate development on Wednesday, Jordan closed its main border crossing with Syria amid fierce clashes between rebels and government forces for control of the post.
"The Jaber border post has been been temporarily closed to travellers and goods," Jordanian Interior Minister Hussein Majali told the AFP news agency.
The closure, he said, was a "preventative measure to safeguard the lives and security of travellers due to the fighting underway on the other side of the border".
Following the move, a coalition of Syrian rebel groups say they have seized the Nasib border crossing with Jordan after fierce clashes with regime forces. It is the second crossing with Jordan to fall into opposition hands.
The Syrian Observatory for Human Rights said that the rebels had earlier besieged the post and were facing air raids and rocket fire from regime forces.
The post is the last remaining border crossing with Jordan still in the hands of Syria's government, as it battles rebels who launched an uprising against Assad's regime in 2011.
Additional reporting by Ryan Rifai
Source: Al Jazeera and agencies