European governments will meet on Friday to discuss imposing sanctions on Syria, responding to the repression by the Assad regime by possibly imposing travel bans and freezing the bank accounts of the president and his relatives, and of key government figures.

It comes as pressure on the Syrian regime increased after the resignation of hundreds of members of President Bashar al-Assad's Ba'ath party in protest at the bloody crackdown, now believed to have claimed at least 500 lives.

The situation is reported to be desperate in the southern city of Deraa, where the dissent began six weeks ago. It remains under siege from tanks of the ultra-loyal Fourth Mechanised Brigade, commanded by Assad's brother, Maher, as well as, residents say, snipers and machine guns.

With even basic supplies running out, locals said they were terrified to leave their homes. One told the Associated Press that 43 people had died in the city since the troops arrived on Monday, including a six-year-old girl shot by a sniper.

More than 230 members of the party that has ruled Syria since 1963 announced their resignation on Wednesday night.

"Considering the breakdown of values and emblems that we were instilled with by the party, and which were destroyed at the hand of the security forces … we announce our withdrawal from the party without regret," said 30 party members from the coastal city of Banias in a letter. About 200 members from the southern Hauran region, which includes Deraa, also stood down.

Senior officials from the 27 EU governments are to discuss sanctions on the Syrian leadership for the first time on Friday, with Britain, France, and Germany encouraging Catherine Ashton, the EU's foreign policy chief, to draw up a list of the toughest measures. While opinion will split on how to respond to the crackdown, diplomats said no one was expected to block action agreed by a majority.

The officials are to receive an intelligence briefing on the situation in Syria and are to discuss a range of options, from a mild slap on the wrist such as suspending an EU association agreement with Damascus, to more punitive measures such as a travel blacklist preventing prominent regime figures from travelling in the EU, and the freezing of bank accounts and other assets.

Figures that would be targeted would be the president's "extended family" and other key officials in the military and security apparatus, diplomats in Brussels said.

While a tougher line is espoused by the EU's big three, Germany, France, and Britain, as well as Denmark and the Netherlands, the Austrians are said to be lukewarm on sanctions, while the Swedish foreign minister, Carl Bildt, regularly voices his scepticism on the utility of sanctions against foreign governments.

While the international response has so far been limited to stern words and vague threats – a divided UN security council is seen as unlikely to agree on sanctions – the US has raised the stakes by specifically linking the Syrian crackdown with its main antagonist in the region, Iran. The US ambassador to the UN, Susan Rice, said Washington was "very conscious of and concerned by the evidence of active Iranian involvement and support on behalf of the Syrian government and its repression of its people". She refused to go into details.

With outside media barred and many communications cut off, it has been impossible to verify the reports from Deraa. A series of residents have described dozens of corpses left in the streets and staple supplies including blood and baby formula running out. One local told Reuters: "Anyone who gets out will find a sniper ready to shoot him. They are not sparing anyone, men, women or children."

Large numbers of Syrian women and children have crossed into northern Lebanon to escape fighting, Reuters reported. Mahmood Khazaal, former mayor of the Lebanese border town of al-Buqaya, said 1,500 people had come on foot.

The Syrian human rights organisation Sawasiah said that at least 500 civilians have been killed since protests demanding political freedom and an end to corruption erupted. There were also reports of fresh shooting in the Damascus suburb of Douma. Around 90 people were arrested and scores reportedly injured after tanks rolled into Madaya, a small mountain town 25 miles north-west of the capital.

A witness told al-Jazeera he saw tanks and armoured personnel carriers surrounding Madaya, where all mobile and landline phone connections and electricity were cut from 4am until 9am. "We don't understand why this is happening," he said. "There were no plans for protests today and neither had any protests been held in the city in the past two days."

There have also been unconfirmed reports of limited dissent within the military, including soldiers from a regiment separate from the Fourth Mechanised Brigade refusing to fire on civilians in Deraa. The government denied there had been any splits in the military, which is seen as fiercely loyal to Assad.

Opposition activists in Damascus were heartened by news of the Ba'ath party resignations. "It is only low-level but it shows that discontent is rippling through the ranks," said one local analyst.

Although the officials have no real power, splits from the party, whose position as the leading party in state and society is enshrined in the constitution, are rare. At least 10% of Syria's population of 22 million is believed to belong to the party, which has as a long-standing power base the rural and poorer sections of society to which many protesters also belong.

Despite the increasing death toll, activists are predicting more people will take to the streets following Friday prayers, often a time for dissent.

Wissam Tarif, the executive director of human rights organisation Insan, told the Guardian: "Youth from many cities are saying they prefer death to silence and detentions."

• The following correction was printed in the Guardian's Corrections and clarifications column, Wednesday 4 May 2011. We mentioned that one idea being discussed by officials was suspension of an EU association agreement with Damascus. A reader queried this, noting that Syria has yet to sign the agreement. To clarify, the story was correct: one of the penalties being considered was indeed the freezing of progress on finalising the agreement, which Brussels had earlier cleared for signature on its side.