Rebels and allied jihadists have launched a new attack in east Damascus, two days after Syrian government forces repelled an initial assault.
A rebel official said they had retaken ground in the Jobar district which they gained on Sunday and then lost during fierce clashes.
But state media said the "infiltration attempts" had been foiled and that troops had begun clearing the area.
On Monday, warplanes carried out dozens of strikes on nearby rebel-held areas.
Fighting since the weekend has left at least 38 pro-government fighters and 34 rebels and jihadists dead, according to the Syrian Observatory for Human Rights.
The head of the UK-based monitoring group, Rami Abdel Rahman, told AFP news agency that Tuesday's rebel assault began with a "big blast at dawn, most likely due to a car bomb attack by the rebels against a regime position between the districts of Jobar and Qaboun".
The air force responded with raids on rebel positions, while rebels shelled the Abbasiyin and Tijara areas, he added.
The Islamist rebel faction Faylaq al-Rahman announced on Twitter "the second phase" of a "steadfast battle" had begun.
"Thank God, all locations in which the [government] forces had advanced over the past few hours have been retaken. New locations have been seized and the [rebel] advance is ongoing amid collapses amongst the enemy's ranks," it said.
Another Islamist faction, Ahrar al-Sham, declared several hours later that its fighters had seized a textile factory. It posted a video purportedly showing them stamping on portraits of President Bashar al-Assad inside the building.
The official Sana news agency cited a military source as saying army units had repelled Tuesday's attack on the Maghazel al-Naseej area of Jobar by what it said were fighters from al-Nusra Front, a former al-Qaeda affiliate that recently formed an alliance called Hayat Tahrir al-Sham, and "other terrorist groups".
On Sunday morning, fighters from several rebel factions, Tahrir al-Sham and other jihadists launched a surprise assault on a government-controlled part of Jobar.
They managed to capture an industrial area adjoining the rebel-held Qaboun district and reached Abbasiyin, only 1.2km (0.7 miles) north-east of the Old City.
Image captionThe state news agency published photos of the industrial area at the centre of the fighting
Government forces subsequently launched a fierce counterattack and by Sunday evening state media were reporting that they had regained the industrial area.
Meanwhile, the UN special envoy for Syria, Staffan de Mistura, has said that all parties to the conflict have confirmed their participation in a new round of talks in Geneva on Thursday that are aimed at finding a political solution to the civil war.
Government and rebel factions agreed to a nationwide cessation of hostilities in December, but both sides have accused each other of repeated violations. Tahrir al-Sham and the rival jihadist group, Islamic State, are excluded from the truce.
Activists say at least 320,000 people have been killed and 11 million displaced since the uprising against President Assad began six years ago.