The Arab League gave Syria one day to sign a protocol allowing monitors into the country or face sanctions over its crackdown on protests including halting flights and suspending transactions with the central bank.
Arab foreign ministers who met in Cairo on Thursday said unless Syria agreed to let the monitors in to assess progress of an Arab League plan to end eight months of bloodshed, officials would consider imposing sanctions on Saturday.
Under a November 2 Arab League initiative, Syria agreed to withdraw troops from urban centres, release political prisoners, start a dialogue with the opposition and allow monitors and international media into the country.
Since then hundreds of people, civilians, security forces and army deserters, have been killed as the unrest which the United Nations says has killed 3,500 people since March continued unabated.
The violence prompted former ally Turkey to bluntly tell President Bashar al-Assad to step down and led France to propose humanitarian corridors in Syria to help transport medicines or other supplies to civilians in need.
French Foreign Minister Alain Juppe said he would discuss the idea with the Arab League but a source at the 22-member body said the proposal was not brought up at the Cairo meeting.
In the case that Syria does not sign the protocol ... or that it later violates the commitments that it entails, and does not stop the killing or does not release the detainees ... (Arab League officials) will meet on Saturday to consider sanctions on Syria, the Arab ministers said in a statement.
They said possible sanctions, which were not intended to affect ordinary Syrians, included suspending flights to Syria, stopping dealings with the central bank, freezing Syrian government bank accounts and halting financial dealings with Syria.
They could also decided to stop commercial trade with the Syrian government with the exception of strategic commodities so as not to impact the Syrian people, the statement said.
Syria's economy is already reeling from the eight months of unrest, aggravated by U.S. and European sanctions on oil exports and several state businesses.
After months in which the international community has seemed determined to avoid direct entanglement in a core Middle East country, the diplomatic consensus seems to be changing.
The Arab League suspended Syria's membership two weeks ago, while this week the prime minister of regional heavyweight Turkey - a NATO member with the military wherewithal to mount a cross-border operation - told Assad to quit and said he should look at what happened to fallen dictators such as Adolf Hitler, Benito Mussolini and Libya's deposed leader Muammar Gaddafi.
France became the first major power to seek international intervention in Syria when it called for humanitarian corridors in Syria to alleviate civilian suffering.
A Western diplomatic source said the French plan, with or without approval from Damascus, could link Syrian civilian centres to frontiers such as Turkey and Lebanon, to the Mediterranean coast or to an airport.
Its aim would enable the transport of humanitarian supplies or medicines to a population that is suffering, the source said.
Juppe insisted the plan fell short of a military intervention, but acknowledged that humanitarian convoys would need armed protection.
There are two possible ways: That the international community, Arab League and the United Nations can get the regime to allow these humanitarian corridors, he told French radio on Thursday. But if that isn't the case we'd have to look at other solutions ... with international observers.
Asked if humanitarian convoys would need military protection, he said: Of course... by international observers, but there is no question of military intervention in Syria.
He added that he had spoken to partners at the United Nations and U.S. Secretary of State Hilary Clinton, and would speak later on Thursday to the Arab League. On Wednesday Juppe also said the exiled opposition Syrian National Council was a legitimate group that France sought to work with.
In a sign of Paris' growing frustration at events on the ground, Foreign Ministry spokesman Bernard Valero said France was particularly concerned with what was happening in the city of Homs, which has become a centre of resistance against Assad.
Information from several sources tells us that the situation in Homs is particularly worrying. It would appear to be under siege today, deprived of basic materials and experiencing a brutal repression, he said.
A way must be found so that this city is supplied with humanitarian aid, he added.
The Syrian Observatory for Human Rights, a British-based group, said at least 23 people were killed in Syria on Thursday, including six civilians in the city of Homs.
Eleven military and security personnel were killed by army deserters in the city of Houla, the Observatory said. Alongside the mainly peaceful protests, armed insurgents have increasingly attacked military targets in recent weeks.
State media have reported the funerals of 34 soldiers and police in the last four days. Since the outbreak of the uprising officials have blamed armed groups for the violence and say 1,100 members of the security forces have been killed.
MOST DANGEROUS PHASE
Activists and a resident said Syrian troops in tanks fired on hideouts of army deserters near the central town of Rastan on Thursday, two months after the authorities said they had regained control of the region.
The Syrian crisis may or may not have entered its final phase, but it undoubtedly has entered its most dangerous one to date, the International Crisis Group said on Thursday.
Many in Syria and abroad are now banking on the regime's imminent collapse and wagering that all then will be for the better. That is a luxury and optimism they cannot afford.
Washington repeated an appeal on Wednesday for U.S. citizens to leave Syria: The U.S. Embassy continues to urge U.S. citizens in Syria to depart immediately while commercial transportation is available, the embassy said on its website.
The U.S. navy said the aircraft carrier USS George H.W. Bush arrived this week in the Mediterranean, en route to the United States.
It is probably routine movement, said a Western diplomat in the region. But it is going to put psychological pressure on the regime, and the Americans don't mind that.
NATO spokeswoman Oana Lungescu said allies were watching the situation in Syria with great concern, but reiterated that the alliance had no intention to intervene in Syria as it had done in Libya.
There's been no request and there is no specific discussion about these proposals, she said in response to Juppe's proposal.
She said the situation in Syria could not be compared with Libya, where NATO had a clear United Nations mandate for intervention and support from the Arab League.
Assad, 46, seems prepared to fight it out, playing on fears of a sectarian war if Syria's complex ethno-sectarian mosaic shatters and relying on support of senior officials and the military to suppress the protests, inspired by Arab uprisings which toppled the leaders of Tunisia, Egypt, Libya and Yemen.
However many experts say Assad, who can depend mainly on the loyalty of two elite Alawite units, cannot maintain current military operations without cracks emerging in the armed forces.
(Additional reporting by Khaled Yacoub Oweis in Amman, Marwa Awad and Ayman Samir in Cairo, John Irish in Paris, David Brunnstrom, Robin Emmot and Justyna Pawlak in Brussels; Writing by Dominic Evans; Editing by Peter Graff and Louise Ireland)