* Syrian VP most prominent figure to say Assad cannot win
* French foreign minister says end is near for Assad
* Rebels announce offensive in Hama province
* Government jets bomb Palestinian camp in Damascus
BEIRUT, Dec 17 (Reuters) - Syrian Vice President Farouq al-Sharaa has told a Lebanese newspaper that neither the forces of President Bashar al-Assad nor rebels can win the war in Syria.
Sharaa, a Sunni Muslim in a power structure dominated by Assad's Alawite minority, has rarely appeared in public since the revolt erupted in March 2011.
The newspaper, al-Akhbar, released only limited excerpts on Sunday from the interview appearing in Monday's edition, and it was far from clear that Sharaa's comments represented the view of the government.
But he is still the most prominent figure to say in public that the crackdown will not win. The paper, which generally takes a pro-Assad line, said Sharaa had been speaking in Damascus.
In the first phase of the 21-month-old civil war, which has claimed at least 40,000 lives, Damascus was distant from the fighting.
Rebels have now brought the war to the capital, without succeeding in delivering a fatal blow to the government.
But nor has Assad found the military muscle to oust his opponents from the city.
In Paris, Foreign Minister Laurent Fabius of France, one of the major powers most insistent that Assad has lost his legitimacy, told RFI radio: "I think the end is nearing for Bashar al-Assad."
OFFENSIVE IN HAMA
On the ground, rebels said they were launching an operation to seize the central province of Hama to try to link northern rural areas of Syria under their control to the centre.
Qassem Saadeddine, a member of the newly established rebel military command, said fighters had been ordered to surround and attack checkpoints across the province. He said forces loyal to Assad had been given 48 hours to surrender or be killed.
"When we liberate the countryside of Hama province ... then we will have the area between Aleppo and Hama liberated and open for us," he told Reuters.
The city of Hama in the province of the same name has a special resonance for anti-Assad activists. In 1982 Hafez al-Assad, father of the current ruler, crushed an uprising in the city, killing up to 30,000 civilians.
In Damascus, activists said fighter jets had bombed the Yarmouk Palestinian refugee camp, killing at least 25 people sheltering in a mosque.
The attack was part of a month-old campaign by Assad's forces to eject rebels from positions they are establishing around the capital's perimeter. Yarmouk, to the south, falls within an arc of territory running from the east of Damascus to the southwest from where rebels hope to storm the government's main redoubt.
Opposition activists said the deaths in Yarmouk, to which refugees have fled from fighting in nearby suburbs, resulted from a rocket fired from a warplane hitting the mosque.
A video posted on YouTube showed bodies and body parts scattered on the stairs of what appeared to be the mosque.
The latest battlefield accounts could not be independently verified due to tight restrictions on media access to Syria.
Syria is home to more that 500,000 Palestinian refugees, most living in Yarmouk, and both Assad's government and the rebels have enlisted and armed Palestinians as the uprising, which began as a peaceful street movement 21 months ago, has mushroomed into a civil war.
Heavy fighting broke out 12 days ago between Palestinians loyal to Assad and Syrian rebels, together with a brigade of Palestinian fighters known as Liwaa al-Asifah (Storm Brigade).
After Sunday's air strike, clashes flared anew between Palestinians from the pro-Assad Popular Front for the Liberation of Palestine-General Command (PFLP-GC) and rebels including other Palestinian fighters, according to the Syrian Observatory for Human Rights monitoring group.
Some PFLP-GC fighters were killed, the London-based Observatory said. Opposition activists and the Observatory said many were trying to escape the internal fighting in Yarmouk.
INFANTRY COLLEGE CAPTURED
In the latest of a string of military installations to fall to the rebels, the army's infantry college north of Aleppo was captured on Saturday after five days of fighting, a rebel commander with the powerful Islamist Tawheed Brigade said.
Insurgents first reported seizing the infantry college on Saturday, but the Syrian Observatory for Human Rights said later that day there was still fierce fighting going on.
The commander whose Tawheed brigade took part in the assault said the rebels had surrounded the college, located 16 km (10 miles) north of Aleppo, Syria's largest city, three weeks ago.
"At least 100 soldiers have been taken prisoner and 150 decided to join us. The soldiers were all hungry because of the siege," the commander, who spoke on condition he was not further identified, told Reuters by telephone.
Desperate food shortages are growing in parts of Syria. Residents of Aleppo say fistfights and dashes across the front lines have become part of the daily struggle to secure a loaf of bread.
Violence continued across the country. Syrian forces killed 25 people in the town of Helfaya in Hama province when they shelled it with warplanes and artillery for the first time since February, opposition activists said.
Ten fighters were killed in shelling in Deraa, the cradle of the revolt against Assad.
Damascus has accused Western powers of backing what it says is a Sunni Islamist "terrorist" campaign to topple Assad, a member of the minority Alawite sect affiliated with Shi'ite Islam. It says that U.S. and European concerns about Assad's forces possibly resorting to chemical weapons could serve as a pretext for preparing military intervention.
In Lebanon, Sayyed Hassan Nasrallah, leader of the Islamist Hezbollah militia group, said the rebels could not win in Syria.
"The situation in Syria is getting more complicated (but) anyone who thinks the armed opposition can settle the situation on the ground is very, very, very mistaken."
Syrian rebels accuse Hezbollah, a Shi'ite Muslim group, of sending fighters to neighbouring Syria to help Assad overcome the largely Sunni Muslim revolt. Hezbollah denies these accusations.
Assad's and Hezbollah's main ally in region, Iranian President Mahmoud Ahmadinejad, cancelled a visit to Syria's estranged neighbour Turkey a day after his military chief said the deployment of NATO missile defences along its border with Syria could lead to a "world war", Turkey's state-run Anatolian news agency said.