The Arab League said it will maintain sanctions imposed on Syria, after President Bashar al-Assad's government demanded the removal of the punitive measures as a condition for admitting observers.
Separately, the US plans a show of support for Syrians pressing to end Drd Assad's rule.
Secretary of State Hillary Clinton is scheduled to meet seven Syrian opposition figures today in Geneva, according to a US official who was authorized to speak on condition of anonymity.
It will be only the second time that Ms Clinton has held such talks.
Syria is attempting to bargain with the Arab League, which imposed sanctions in response to Dr Assad's crackdown on opposition. The government would agree to let in Arab League observers provided the bloc restored Syrian membership and ended the sanctions in an agreement signed in Damascus, Foreign Minister Walid al-Muallem said in a letter to the group, according to the official Syrian Arab News Agency.
That response "will not lead to suspending Arab sanctions on Syria," Arab League Secretary-General Nabil el-Arabi said, according to Egypt's state-run Middle East News Agency.
The league ordered a freeze on the assets of 19 Syrian officials, a ban on their travel and a reduction in flights to Syria on December 3rd if the government refuses to admit international monitors, release political prisoners and end its crackdown on protests.
Half of air travel between Syria and Arab League states will be cut starting on December 15, the league said.
Dr Assad faces growing economic and political pressure to end a crackdown against unrest that began in mid-March, inspired by movements that toppled leaders in Tunisia, Egypt and Libya.
The violence risks moving Syria closer to a civil war as military personnel defect and take up arms against the government, the United Nations' top human-rights official said last week.
"The ultimate impact will depend on the effectiveness of enforcing these regulations," Jarmo Kotilaine, chief economist at Jeddah-based National Commercial Bank, said in response to e- mailed questions.
The US and the European Union have added to the political and economic pressure by imposing their own sanctions, while the United Nations has been paralyzed since October by Russian and Chinese objections to passing a resolution to condemn the violence.
Elsewhere, Israeli defence minister Ehud Barak today said Syrian president Dr Assad's decision to stage military exercises amid international calls for his removal was an act of desperation that demonstrates waning control of his nation.
The war games were a "desperate step for a leader whose days in power are numbered," Mr Barak said during a review of troops in the Golan Heights.
Bloomberg