RABAT (Reuters) - The Arab League moved a step closer to imposing economic sanctions on Syria on Wednesday and signaled it was running out of patience with President Bashar al-Assad's failure to halt an eight-month-old crackdown on protests.
Syrian army defectors attacked an intelligence complex on the edge of Damascus in a high-profile assault that showed how close the popular uprising against Assad's rule now is to sliding into armed conflict.
Further intensifying the international pressure on Assad to end his repression of protests, France withdrew its ambassador from Syria and Foreign Minister Alain Juppe said Paris was working with the Arab League on a draft U.N. resolution.
Last month Russia and China vetoed a U.N. Security Council resolution condemning Damascus, but the Arab League's decision last weekend to suspend Syria has given international moves new momentum.
On the day the suspension came into force, the League's foreign ministers met in the Moroccan capital with a Syrian flag next to an empty chair where the Syrian minister, who boycotted the meeting, would have sat.
The League -- which normally shies away from decisive action against its own members -- decided at the meeting to ask its experts to draft recommendations on economic sanctions on Syria.
The decision brought a plan announced at the weekend one step closer to implementation.
At their meeting in Rabat, the Arab foreign ministers also gave Damascus three days to implement a road map agreed this month to end the bloodshed and allow in observers, though they did not say what would happen if Syria failed to comply.
Asked if the ultimatum was a last attempt at diplomacy, Qatari Foreign Minister Sheikh Hamad Bin Jassim al-Thani told reporters: "We do not want to talk about a last-ditch attempt because I do not want this to sound like a warning.
"What I can say is that we are close to the end of the road as far as the (League's) efforts on this front are concerned."
The Arab League has stopped short of calling for Assad's departure or proposing any Libya-style military intervention, but its ostracism of Syria is a blow to a country whose ruling Baath party puts Arab nationalism at the center of its credo.
In Damascus, Assad supporters threw stones at the embassy of the United Arab Emirates, in one of the most secure districts of the city, and smeared its walls with graffiti, witnesses said.
Speaking earlier in Rabat, Turkish Foreign Minister Ahmet Davutoglu compared Syria with Libya, where rebels captured, humiliated and killed Muammar Gaddafi last month.
"The regime should meet the demands of its people," he said. "The collective massacres in Syria and ... the bloodshed cannot continue like this."
Turkey has spent years courting its neighbor, but is now leading regional efforts to pit pressure on Assad.
In Tehran, Iranian Foreign Minister Ali Akbar Salehi criticized the Arab League for "acting in a way that will hurt the security of the region." He told the official news agency IRNA that Syria, an ally of Iran since 1980, had repeatedly pledged to meet legitimate popular demands and enact reforms.
"Unfortunately, some countries believe that they are outside the crisis ... but they are mistaken because if a crisis happens they will be entangled by its consequences."
Western countries have tightened sanctions on Syria and on Monday Jordan's King Abdullah became the first Arab head of state to urge Assad to quit.
In the early months of the uprising, attempts by security forces to crush mainly peaceful protests accounted for most of the violence. But since August there have been growing reports of army defectors and armed civilians fighting back.
Activists said Free Syrian Army fighters fired machineguns and rockets at a large Air Force Intelligence complex on the northern edge of the capital at about 2:30 a.m. (0030 GMT).
A gunfight ensued and helicopters circled over the complex, on the Damascus-Aleppo highway. There were no immediate reports of casualties. Syrian state media did not mention the attack.
Washington said it had few details and no confirmation of the incident, but that Assad was courting trouble.
"It's not surprising that we are now seeing this kind of violence," State Department spokesman Mark Toner said.
"We don't condone it in any way, shape or form. But let's be very clear that it is the brutal tactics of Assad and his regime in dealing with what began as a non-violent movement (that) is now taking Syria down a very dangerous path."
A Western diplomat in Damascus described the assault as "hugely symbolic and tactically new," saying that if the reported details were true it would be "much, much more coordinated than anything we have seen before."
"To actually attack a base like this is something else, and so close to Damascus as well," said the diplomat, adding that fighting in recent weeks involving army deserters in the town of Rastan and the city of Homs resembled a localized civil war.
"It's not a nationwide civil war, but in very specific locations, it is looking like that," said the diplomat.
The Free Syrian Army was set up by deserters and is led by Colonel Riad al-Asaad, who is based in southern Turkey.
It announced this week that it had formed a "temporary military council" of nine rebel officers, led by Asaad.
The statement said the Free Syrian Army aimed to "bring down the regime and protect citizens from the repression ... and prevent chaos as soon as the regime falls," adding that it would form a military court to try "members of the regime who are proven to have been involved in killing operations."
Syrian television showed thousands of Assad's supporters rallying in Damascus and Latakia to mark the day his father Hafez al-Assad seized power in 1970. It said the crowds were also voicing their rejection of the Arab League's decision.
"God, Syria, Bashar, nothing else!" shouted demonstrators in central Damascus, who turned out in heavy rain to wave flags and posters of the president. Two large posters of Assad and his father hung from a building. "Neither rain nor sanctions will stop us expressing our nationalism," the television said.
Syrian authorities have banned most independent media. They blame the unrest on "armed terrorist gangs" and foreign-backed militants who they say have killed 1,100 soldiers and police.
Hundreds of people have been killed this month, one of the bloodiest periods of the revolt.
Syria says it remains committed to the Arab peace plan, which calls for the withdrawal of troops from urban areas, the release of prisoners and a dialogue with the opposition.
Additional reporting by Khaled Yacoub Oweis in Amman, Zakia Abdennebi in Rabat, Dominic Evans in Beirut, John Irish in Paris, Mahmoud Habboush in Dubai and Ramin Mostafavi in Tehran; Writing by Alistair Lyon and Christian Lowe; Editing by Kevin Liffey