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CAIRO, Egypt - A clash between Syrian forces and army defectors erupted Sunday in a suburb of the tightly held capital of Damascus, adding urgency just as the Arab League was extending an observers' mission that so far has failed to end long months of bloody violence.

The two events outlined how an uprising against President Bashar Assad that started with mass popular protests is moving now toward an armed conflict that could draw international intervention -- an outcome the Arab League is trying to avoid.

Arab League foreign ministers, meeting in Cairo, extended the much-criticized observers mission for another month, according to a statement from the 22-member organization.

The League decided to add more observers and provide them with additional resources, the officials said.

The observer mission is supposed to be the first step toward implementing an Arab League plan to end the Syria crisis. Other points are pulling heavy Syrian weapons out of cities, stopping attacks on protesters, opening talks with the opposition and allowing foreign human rights workers and journalists in.

"There is partial progress in the implementation of the promises," Arab League chief Nabil Elaraby said in Cairo about Syria's implementation of the plan. Syria "did not carry out all its promises, although there are some implementation of pledges."

He added that the use of "extreme force" by Syrian forces have led to a reaction by the opposition "in what could lead to civil war."

Qatari Foreign Minister Sheik Hamad Bin Jassem Bin Jabr Al Thani told reporters after the meeting that the Arab League was launching a new initiative to solve the crisis in which the Syrian government and the opposition would form a unity government with in two weeks to lead to the country through a transitional period in which elections would be held and a new constitution written.

It was seen as highly unlikely that Syrian authorities or the leaders of Syria's scattered opposition would agree to such a plan.

Saudi Foreign Minister Saud al-Faisal told reporters that his country will pull out its observers because "the Syrian government did not implement the Arab plan." He urged Muslim countries, China, Russia, Europe and the U.S. to put pressure on Assad's government to stop the violence.

Saudi Arabia has been one of the harshest Arab critics of the crackdown, It recalled its ambassador from Damascus last year in protest.

So far the observer mission has not gone well. Though some credit it with tamping down violence in some places, the Local Coordination Committees activist group said Sunday that 976 people, including 54 children and 28 women, have been killed since the observers began their mission last month.

The U.N. estimates some 5,400 have been killed since it began in March.

The Arab League faced three options Sunday: ending the mission and giving up its initiative, extending it, or turning the crisis over to the U.N. Security Council, as some opposition groups have urged. There, however, it would face a possible stalemate because of disagreements among permanent members over how far to go in forcing Assad's hand.

The mission's one-month mandate technically expired on Thursday.

The pullout of Assad's security forces from the Damascus suburb of Douma marked the second time in a week that troops have redeployed from an area near the tightly-controlled Syrian capital, an indication that Assad might be losing some control.

Diplomacy has taken on urgency as opponents of Assad's regime and soldiers who switched sides increasingly take up arms and fight back against government forces.

The British-based Syrian Observatory for Human Rights' head Rami Abdul-Rahman said government troops had pulled back early Sunday to a provincial headquarters and a security agency building in the Damascus suburb of Douma after hours of clashes, although they still controlled the entrances. The clashes broke out after Syrian troops opened fire at a funeral on Saturday.

On Sunday afternoon, the battles resumed between the defectors and troops loyal to Assad, according to the Observatory and the Local Coordination Committees, another activist group. The LCC said that heavy machine-gun fire was used in the clashes, and five people were killed.

Abdul-Rahman had no information on casualties from the clashes but said security forces at an entrance checkpoint shot dead one man who was passing by on Sunday. He added that one person was shot dead in a nearby town of Rankous as well as another person in the northwestern province of Idlib.

The LCC said 12 people were killed in Syria Sunday. The LCC and the Observatory reported intense gunfire in the central city of Homs that left at least one person dead.

State-run news agency SANA said gunmen opened fire at the car of an army brigadier general, killing him and another army officers who was in the vehicle.

Syria-based activist Mustafa Osso confirmed that security forces had abandoned Douma.

Also Sunday, state-run SANA, said an estimated 5,255 Syrian prisoners have been released over the past week under an amnesty, raising the total freed since November to more than 9,000. Opposition groups say thousands are still being held.

The U.S. has imposed sanctions on Syria as the bloodshed escalates. The U.S. has long called for Assad to step down, and officials say his regime's demise is inevitable.

Two U.S. Senators plan to introduce a bill to stiffen the sanctions.

The bill, sponsored by Democratic Senators Charles Schumer and Kirsten Gillibrand of New York would require President Barack Obama to identify violators of human rights in Syria, call for reform and offer protection to pro-democracy demonstrators. It would also block financial aid and property transactions in the United States involving Syrian leaders involved in the crackdown.