Syria's opposition and its international backers have rejected Bashar al-Assad's latest initiative to end the 21 months of violence, insisting that he offered no meaningful concessions and should surrender power at once.

Hopes of a breakthrough were dashed after an hour-long speech in Damascus in which the Syrian president called for "a war to defend the nation" against "terrorist" violence and urged foreign countries to stop supporting his enemies – while offering a national dialogue and a constitutional referendum.

He proposed what he called a "comprehensive plan" that included an "expanded government". But there was no sign that he was prepared to step down as the first stage of a political transition – a demand of all opposition groups. "I will go one day, but the country remains," he said.

Assad referred repeatedly to "plots" against his country and the role of al-Qaida, long portrayed as the leading element in what began as a popular uprising in March 2011. Syria was not facing a revolution but a "gang of criminals" and "western puppets", he said. "We are now in a state of war in every sense of the word," the president told cheering supporters. "This war targets Syria using a handful of Syrians and many foreigners. Thus, this is a war to defend the nation."

The speech from the stage of the Damascus Opera House in the heart of the capital was punctuated by thunderous applause and loyalist chants from what was certainly a carefully selected audience. The city was described as being under a security lockdown before the event. Internet services were disconnected.

But it was hard to see how the president's public speech – the first in seven months – offered even a faint glimmer of a way out of the bloody impasse between the regime and rebels in a conflict which the UN said last week had claimed 60,000 lives.

The opposition Syrian National Coalition said the closely watched address marked an end to diplomatic efforts led by the UN mediator Lakhdar Brahimi. "The appropriate response is to continue to resist this unacceptable regime and for the Free Syrian Army to continue its work in liberating Syria until every inch of land is free," said George Sabra, its deputy president.

"It was a waste of time. He said nothing constructive," a spokesman, Louay Safi, told al-Jazeera TV. "It was empty rhetoric."

Walid al-Bunni, a veteran activist, said: "The genuine opposition inside and outside Syria won't accept the initiative."

Assad's speech was "beyond hypocritical", Britain's foreign secretary, William Hague, commented on Twitter. "Deaths, violence and oppression engulfing Syria are his own making, empty promises of reform fool no one."

Egypt's president, Mohamed Morsi, told CNN that he supported calls for Assad to be tried for war crimes.

Assad's last last public speech was in June 2012. In November he told Russian TV he would "live and die in Syria".

Opposition media described clashes taking place between government and rebel forces near the Yarmuk refugee camp as well as anti-Assad demonstrations in Qadam and Homs. In all, 52 people were reported killed, according to the Syrian Observatory for Human Rights, a UK-based monitor.

Reconciliation could take place only with those "who have not betrayed Syria", the president declared, repeating that the government had no "partner" for peace. There could not be simply a political solution he insisted, but there had to be an end to violence and terror. There was loud cheering when he praised the bravery of the Syrian armed forces.

Assad said a "national dialogue" would draw up a charter to be put to a national referendum, followed by parliamentary elections and a general amnesty.

But Turkey's foreign minister, Ahmet Davutoglu, thought Assad had simply repeated empty promises. "As Assad no longer has the representative authority over the Syrian people, his words have lost persuasiveness," he said. "A transition period needs to be completed swiftly through talks with representatives of the Syrian nation."

In Brussels, the EU foreign affairs chief, Cathy Ashton, promised to "look carefully" at the speech, but added: "We maintain our position that Assad has to step aside and allow for a political transition."

In his speech, Assad thanked Russia, China and Iran for supporting Syria in the face of hostility from the US, Britain and France.

"Syria is impervious to collapse and the Syrian people impervious to humiliation," he concluded. "We will always be like that. Hand in hand we will move ahead, taking Syria to a brighter and stronger future."