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Syria on Monday hit back at the United Nations over the fate of Palestinian refugees after UN chief Ban Ki-moon voiced "grave concern" following a deadly air strike on Yarmuk camp in southern Damascus.

"The United Nations and international community are responsible for the frustrations of the Palestinians because they have not implemented UN resolutions related to their legitimate rights," Foreign Minister Walid Muallem said.

"Syria offered something to our Palestinian brothers decades ago that no other Arab host country has offered," he told Ban in a telephone call, quoted by state news agency SANA.

The foreign minister was referring to the granting of equal social rights and to living conditions in Syria's Palestinian refugee camps, long considered the best in the region.

Sunday's air strike on Yarmuk carried out by the Syrian military was the first against the country's Palestinian refugee camps, whose residents are divided over the 21-month conflict between rebels and regime forces.

Clashes since Sunday have pitted the pro-regime Popular Front for the Liberation of Palestine-General Command against rebel fighters, some of them also Palestinians, according to the Syrian Observatory for Human Rights.

The pro-regime newspaper Al-Watan said on Monday that street battles between the PFLP-GC and insurgents in Yarmuk had "forced the army to intervene with air attacks on the positions of the gunmen."

Ban said the air attack on Sunday on Yarmuk camp was "a matter of grave concern," as activists said at least eight people were killed, and he warned both sides that attacks on civilians could amount to "war crimes".

"The secretary general is alarmed by the continued dramatic escalation of violence in Syria over the past several days, and the grave danger facing civilians in areas under fire," said UN spokesman Martin Nesirky.

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

Washington last week blacklisted Al-Nusra Front as a terrorist organisation. Originally known for its deadly car bombings, the hardline group has become one of the most effective rebel forces on frontlines across Syria.

According to Muallem, the fighting in Yarmuk was between "terrorist groups receiving financial support and arms from some neighbouring countries and the popular committees of the PFLP-GC".

"Be careful, Palestinian brothers," the foreign minister warned. "Do not harbour or assist these terrorist groups who are alien to the camp, but work to expel them."

He stressed that "the Palestinian cause, the legitimate rights of her people and liberation of the occupied territories are the goals that Syria is struggling to achieve."

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