The Syrian army shelled rebel positions inside a Palestinian refugee camp on the edge of Damascus on Sunday killing at least 20 people, opposition campaigners said.

The Yarmouk camp, adjacent to the capital's southern entrance, has become the latest battle ground between forces loyal to Bashar al-Assad and rebels fighting to end the president's rule.

"Yarmouk is a dense area and shelling it always results in a human catastrophe. We have 20 people killed, including medics who had to tried to help injured people in the streets, and dozens of wounded," said activist Muhammad al-Hur.

Syria hosts half a million Palestinian refugees, mostly descendants of those who fled their homes during and after the creation of Israel in 1948.

Assad and his father, the late President Hafez al-Assad, have always cast themselves as a champion of the Palestinian struggle, sponsoring several competing guerrilla factions.

But Syria's uprising has split Palestinian loyalties, with many Palestinians sympathetic to the uprising by their fellow Sunnis and some backing Assad. The president has the support of the Popular Front for the Liberation of Palestine-General Command (PFLP-GC), headed by Palestinian guerrilla Ahmad Jibreel.

Some rebels said last week they had begun arming sympathetic Palestinians to fight the PFLP-GC, which has helped Assad in his crackdown on the 19-month-old revolt.

The shelling of suspected rebel positions in Yarmouk, a swarming camp home to 150,000 Palestinian refugees and perhaps as many Syrians, appeared to be the army's way of supporting the PFLP-GC.