The bomber, said by a security source to be a bodyguard assigned to Assad’s inner circle, struck a meeting in central Damascus attended by ministers and senior security officials as battles raged within sight of the nearby presidential palace.
Washington, which fears a spillover into neighboring states, said the situation seemed to be spinning out of control.
State television said Defence Minister Daoud Rajha and Assad’s brother-in-law Assef Shawkat, the deputy defence minister, had been killed in a “terrorist bombing” and pledged to wipe out the “criminal gangs” responsible.
A Syrian security source confirmed Shawkat, 62, - a pillar of Assad’s rule - had been killed and said General Hassan Turkmani, a former defence minister and head of the regime’s crisis cell,, had died later of his wounds. Intelligence chief Hisham Bekhtyar and Interior Minister Mohammad Ibrahim al-Shaar were also wounded, security sources said.
The men form the core of a military crisis unit led by Assad to take charge of crushing the revolt which grew out of a popular protests inspired by Arab Spring uprisings that unseated leaders in Tunisia, Egypt and Libya.
Assad has not appeared in public since the attack or made any statement, but security sources said he was not at the meeting where it took place.
The armed forces chief of staff, Fahad Jassim al-Freij, quickly took over as defence minister avoiding to give any impression of official paralysis.
“This cowardly terrorist act will not deter our men in the armed forces from continuing their sacred mission of pursuing the remnants of these armed terrorist criminal gangs,” Freij said on state television. “They will cut off every hand that tries to hurt the security of the nation or its citizens.” The explosion appeared to be part of a coordinated assault on the fourth day of fighting in the capital which rebel fighters have called the “liberation of Damascus” after months of clashes which activists say have killed more than 17,000 people.
It began early on Wednesday with fighting around an army barracks in the district of Dummar, hundreds of meters from the presidential palace, and was followed by blasts close to the base of the elite 4th armored division in the southwest. The unit, led by Assad’s brother Maher, has been instrumental in crushing protests around Syria.
“This is a situation that is rapidly spinning out of control,” US Defence Secretary Leon Panetta said, calling for maximum global pressure on Assad to step down.
Western leaders fear the conflict could destabilise Syria’s neighbours - Israel, Lebanon, Turkey, Iraq and Jordan. Syrian Information Minister Omran Zoabi blamed Western and Sunni Arab governments for the crisis. “They are responsible for every drop of blood. And they will be accountable,” he said. “I stress to them that this is the decisive battle in all of Syria,” Zoabi said on state television.
Rebels say they have brought reinforcements from outside the city to end four decades of rule by the Assad family by attacking the power base of the ruling elite for the first time.
Syrian forces hit rebel positions across the capital after the attack on the security meeting, with activists saying government troops and pro-government militia were flooding in.
The army barracks near the “palace of the people”, a huge Soviet-style complex overlooking the city from the district of Dummar, came under rebel fire around 7.30 am (0430 GMT), activists and a resident said. “I could hear the sound of small arms fire, and explosions are getting louder and louder from the direction of the barracks,” Yasmine, an architect, said by telephone from Dummar.
Dummar is a secure area containing many auxiliary installations for the presidential palace and the barracks is just hundreds of meters from the palace itself.
Two rebel groups claimed the attack on the security meeting.
“This is the volcano we talked about, we have just started,” said Qassim Saadedine, a spokesman for the Free Syrian Army, a group of army defectors and Sunni youths.
Liwa al-Islam, an Islamist rebel group whose name means “The Brigade of Islam”, said it had carried out the attack after weeks of planning and gave a different version of events.
“Our men managed to plant improvised explosives in the building for the meeting. We had been planning this for over a month,” a spokesman for the group, who asked to be identified as Abu Ammar, said by telephone.
State television said earlier that it was a suicide bombing. “The terrorist explosion which targeted the national security building in Damascus occurred during a meeting of ministers and a number of heads of (security) agencies,” it said.
Fighting also erupted overnight in the southern neighborhoods of Asali and Qadam, and Hajar al-Aswad and Tadamun - mainly Sunni districts housing Damascenes and Palestinian refugees.
In Damascus, government troops used heavy machine guns and anti-aircraft guns against rebels moving deep in residential neighborhoods, armed mostly with small arms and rocket-propelled grenades.
Rebels directed their fire overnight at a large state facility turned headquarters for pro-Assad militia, known as shabbiha, drawn mainly from Alawite enclaves in nearby hills.
Army tanks and anti-aircraft guns, used as an infantry weapon, took positions in the northern neighborhood of Barzeh, where hundreds of families from the neighboring district of Qaboun are seeking shelter.
“Anti-aircraft guns are firing at Qaboun from Barzeh. There are lots of families in the streets with no place to stay. They came from Qaboun and from the outskirts of Barzeh,” said Bassem, one of the activists, speaking by telephone from Barzeh.
In the central neighborhood of Midan tanks and infantry fighting vehicles known as BDMs took positions in main thoroughfares and sporadic fighting was reported.
Nearly 100 people were killed on Wednesday in violence across Syria, including 16 in Damascus, said the Syrian Observatory for Human Rights.
The Britain-based watchdog reported that 97 people were killed across Syria, including 46 civilians, eight rebel fighters and 43 regime troops. All but one of those killed in the capital were civilians.
Violence engulfed Damascus for a fourth straight day as a bombing killed three of the regime’s top security chiefs who were meeting at the National Security headquarters, in an attack claimed by the rebel Free Syrian Army.
The Observatory reported clashes across the southern, eastern and western outskirts of Damascus, with the most intense fighting in Al-Midan near the city centre.
“FSA fighters welcomed the news of the killing of the three officials by telling regime troops to defect from the army before the regime falls,” an activist in Al-Midan who identified himself as Ahmed told AFP via Skype.