The Syrian army has recaptured a major district of Aleppo, as rebel fighters were forced to retreat during the battle for the country’s second largest city yesterday.

President Bashar al-Assad's forces held more than 90 percent of the opposition stronghold of east Aleppo and appeared on the verge of retaking the entire city, a monitor and military official said.

"We're living the final moments before victory,” said a Syrian military official.

"The operation in eastern neighbourhoods is entering its final phase.”

The fall of Aleppo would be the worst rebel defeat since the beginning of Syria's conflict in 2011, and would leave the government in control of the country's five major cities.

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State television showed people celebrating in the streets of Aleppo, holding up portraits of Assad and Syrian flags.

The British-based Syrian Observatory for Human Rights reported early yesterday that the army had captured the large Sheikh Saeed district in southeast Aleppo.

(AFP)

Syrian official media confirmed the retaking of Sheikh Saeed, with the districts of Mashhad and Sukkari remaining under opposition control, said the Observatory.

"The areas still under opposition control are very small, and they could fall at any moment," Observatory director Rami Abdel Rahman said.

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The Observatory also said the rebels withdrew from six more districts as government troops advanced.

Government warplanes and artillery heavily bombed the remaining rebel-held territory in the east of the city on Sunday and Monday.

Terrified residents fled the rebel-held neighbourhoods as the army advanced since beginning its operation mid last month.

Syria's rebels seized control of east Aleppo in 2012, a year into an uprising that began with anti-government protests.