The Arab League announces sanctions against Syria. Reuters

Syria is facing stiff sanctions imposed by the Arab League after President Bashar al-Assad refused to allow observers into the country to monitor violence that claimed dozens more lives at the weekend. Arab foreign ministers meeting in Cairo on Sunday agreed a package of measures designed to force Assad to end his security crackdown, free prisoners and launch reforms to find an end to the eight-month uprising.

But there was no sign of any flexibility from a defiant Damascus regime, with opposition sources describing columns of Syrian tanks preparing to advance on Homs, the centre of recent heavy fighting.

The league decision halts transactions with Syria's central bank, freezes Syrian assets in other Arab states and Arab investment in Syria. It also imposes a travel ban on senior Syrian officials. Earlier, Arab finance and economy ministers stressed the need to avoid measures which would harm ordinary citizens. Basic commodities and cash remittances from Syrians working in other countries are to be exempt.

Announcement of the landmark agreement came from Qatar's prime minister, Hamad bin Jassem bin Jabr al Thani, who chaired the Cairo meeting. Bin Jassem said the decision, which is to take immediate effect, was backed by 19 of the league's 22 members.

The Qatari leader had warned earlier that Arab failure to agree could lead to Libyan-style intervention by the west. "All the work that we are doing is to avoid this," he said, adding that if the international community did not see that Arabs were "serious" he could not guarantee that such action could be avoided.

Turkey, which is not a member of the league but is encouraging Arab action, said it would implement the sanctions as well.

Opposition to sanctions seemed likely to weaken their impact. Iraq, Syria's largest Arab trading partner, abstained after making clear that it would not back punitive measures, partly in the light of its own experience under Saddam Hussein.

Lebanon, still dominated politically by its larger eastern neighbour, voted against. Both countries also opposed the league's recent decision to suspend Syria's membership. Still, combined with recent calls for Assad to step down – from immediate neighbours Jordan and Turkey as well as the US and many western countries – the measures are certain to add to the sense of isolation in Damascus.

Economists say the most damaging element is likely to be the freeze on assets in the Gulf.

Western governments are quietly monitoring the movement of capital out of Syria as a way of gauging the resilience of the regime and the big businessmen who are closely linked to it. EU and US sanctions are already in force.

The league said it had postponed a proposed ban on Arab civilian airlines from and to Syria but will impose it at a later date.

In Damascus, the state-run Al-Thawra newspaper slammed the proposed sanctions as "targeting the Syrian people". Pro-Syrian voices on Twitter and other social media sites suggested that only Israel would benefit. Others noted that the league action against Syria was more severe than against Egypt when it broke Arab consensus and signed a peace treaty with Israel in 1979.

The latest diplomatic moves had no discernible effect on the situation on the ground. By late afternoon the Syrian Revolution General Commission was reporting 28 dead, including 15 in Homs and six in the Damascus area. The Local Coordination Committees gave a figure of 26 deaths. Opposition sources reported 27 dead on Saturday while the government reported the burial of 22 armed forces personnel, including six pilots who were ambushed near Homs.

Sana, the Syrian state news agency, reported on the funerals on Sunday of nine members of the security forces who were killed by "armed terrorist groups."

In another move that will likely deepen Assad's sense of isolation, the governments of Qatar and Bahrain both advised their nationals to leave Syria. The UAE issued a similar call last week.