AMMAN (Reuters) - Syrian troops tightened the noose on Sunday around a Palestinian refugee camp held by Islamic State militants in southern Damascus where hundreds of civilians face an uncertain future, state media, witnesses and residents said.

Soldiers loyal to Syria's President Bashar al-Assad forces are deployed at al-Qadam area near Yarmouk Palestinian camp in Damascus,Syria April 29,2018.REUTERS/ Omar Sanadiki

Nearly two weeks into a campaign to capture the last area near the capital outside government control that has left many parts of the once-teeming Yarmouk camp in ruins, state media said that the al Qadm neighborhood next to the camp was retaken.

Opposition sources said the army was now engaged in fierce fighting with militants on the outskirts of Yarmouk camp where an estimated 1,500 to 2,000 militants are encircled.

The militants who are besieged in an ever-shrinking area have repelled successive raids to enter their heavily defended stronghold.

State television and the official SANA news agency said a deal had reportedly been reached between the army and “terrorist groups” in the camp to allow them safe passage to the rebel-held northwestern province of Idlib in return for the evacuation of civilians in two besieged Shi’ite villages in the province.

It said the deal’s implementation would begin on Monday with buses arriving at the entrance of the camp.

It did not say which rebel groups were included, but a rebel source said the deal was with the militant Tahrir al Sham, spearheaded by Syria’s former al Qaeda offshoot, which has about 200 fighters in the camp.

Although Islamic State jihadists, the main insurgent group in the camp, have vowed to continue to fight, the surrender of their comrades in arms could hasten a similar deal, two opposition sources said.

The Yarmouk campaign is part of a wider Russian-backed offensive to regain the last pocket in opposition hands around the capital after retaking eastern Ghouta this month.

Slideshow ( 11 images )

It has shown no sign of letting up since Western countries launched air strikes on April 14 to punish the government for a suspected poison gas attack.

SICK AND ELDERLY

The fate of hundreds of Palestinians, mostly sick and elderly women and children still in the camp that was once the largest in Syria, is uncertain. UNRWA, the U.N body responsible for Palestinian refugees, has called on warring parties to spare civilians.

“There are some families that have been buried under the rubble and no one is able to retrieve their bodies,” said Abu Osama, a resident who fled the camp two days ago to nearby Yalda, joining thousands of others seeking relative safety there since the start of the latest offensive.

“The regime is just burning and destroying ... and then trying to advance on several fronts,” said Rami al Sayed, a former resident of Yarmouk who is now on its outskirts.

The camp, which has been under siege by the army since rebels captured it in 2012, was home to some 160,000 Palestinians before the Syrian conflict began in 2011, refugees from the 1948 Arab-Israeli war and their descendents.

Amaq, a news agency affiliated to Islamic State, said its fighters had repelled the latest attacks on their positions in al Qadam and Hay al Tadamon, killing at least 17 army fighters killed in sniper attacks.

The ultra-hardline Sunni militants also pushed overnight into some positions in the southern Damascus pocket where mainly mainstream rebels operating under the umbrella of the Free Syrian Army (FSA) are in control, opposition sources said.

A deal was reached overnight under Russian auspices to evacuate those FSA rebels based in the towns of Yalda, Babila and Beit Sahem that adjoin Islamic State-held areas to opposition held areas in northern Syria, a rebel source said confirming leaks in state media.

Those rebels who have in the past fought both the militants and the Syrian army have also been targeted by the army in an attempt to force them to capitulate.