After days of fighting, Syrian rebels Monday took control of the Yarmouk Palestinian refugee camp located on the southern edge of capital Damascus.

The rebels took control of the region after a fierce battle Sunday when Syrian military, for the first time, carried out an air strike on the country's Palestinian refugee camps, whose residents are divided over the conflict between rebels and regime forces, AFP reported.

The battle had pitted rebels, backed by some Palestinians, against Palestinian fighters of the pro-Assad Popular Front for the Liberation of Palestine-General Command (PFLP-GC), Reuters reported. Many PFLP-GC fighters defected to the rebel side and their leader Ahmed Jibril left the camp two days ago, rebel sources told Reuters. Jibril, accompanied by his son, was reported to be headed for the Mediterranean city of Tartous, a regime stronghold.

The Yarmouk camp houses Palestinians and also Syrians displaced by the fighting.

"All of the camp is under the control of the (rebel) Free Syrian Army," a Palestinian activist in Yarmouk told Reuters. He said clashes had stopped and the remaining PFLP fighters retreated to join Assad's forces stationed at the northern edge of the camp.

The report of the rebels' victory came hours after Syrian Foreign Minister Walid Muallem criticized the U.N., over the fate of Palestinian refugees in Syria after U.N. chief Ban Ki-moon voiced “grave concern” following the military air strike on Yarmouk.

“The United Nations and international community are responsible for the frustrations of the Palestinians because they have not implemented U.N. resolutions related to their legitimate rights," Muallem told Ban over the phone, as quoted by state news agency SANA.

Hundreds of thousands of Palestinians fled or were forced out of their homes during the Arab-Israeli wars in 1948 and 1967. Some 450,000 of them, and their descendants, now live in Syria, according to a BBC report.

"Syria offered something to our Palestinian brothers decades ago that no other Arab host country has offered," he said referring to granting the refugees equal social rights and living conditions as Syrians.

Muallem said rebels Al-Nusra Front had entered the camp with artillery and attacked a hospital.

Washington last week blacklisted Al-Nusra Front, an extremist militant group and one of the most effective rebel forces on frontlines across Syria, as a terrorist organization.

After capturing the last military base in the northern Aleppo province loyal to President Bashar Assad, the rebels Monday said they were close to forcing out the regime forces from much of northern Syria, the USA Today reported.

The Free Syrian Army, comprising the rebel force of deserters and others, estimated that Assad's forces control up to 40 percent of the city.

Meanwhile, Syria's Vice President Farouk al-Sharaa acknowledged that the regime forces cannot defeat the rebels and called for a negotiated settlement to save the country from ruin.

The comments by a longtime close aide to President Bashar Assad's family, in an interview published Monday by Lebanese newspaper Al-Akhbar, suggested that the regime may be contemplating an exit strategy.

“I don't see that what the security forces and army units are doing will lead to a definitive victory," al-Sharaa was quoted as saying in the interview conducted in Damascus.

"All these opposition forces can only conclude the battle to topple the regime if their goal is to push the country into chaos and a cycle of violence that has no end," he added.

He pushed for a negotiated political settlement that includes the formation of a national unity government with wide jurisdiction.