The deadly shelling of Ariha by regime forces in the northwestern province of Idlib also left dozens wounded, said the Observatory, as activists denounced a "massacre" in a video posted online that showed people carrying corpses and bloodied body parts.
Observatory chief Rami Abdel Rahman said regime forces opened fire on the main market in central Ariha from positions they control on the edges of town.
It was not immediately clear what triggered the shelling, but rebels control part of Ariha while regime forces man three checkpoints inside the town.
The Observatory said clashes had erupted in Ariha over the week, as rebels try to expand their control over the town.
In the northeast Damascus flashpoint area of Adra, fierce fighting at dawn between rebels and government troops killed 28 insurgents and a member of the elite Republican Guards, Abdel Rahman said.
Adra is an entry point to the capital's Abbasiyeen Square, the target of several rebel attacks in recent months.
State news agency SANA said the army "captured several terrorists from (the Islamist) Al-Nusra Front, some of them foreign nationals," west of Adra.
Further north, the battle for Syria's second city and commercial hub Aleppo entered its second year with fighting raging around the city's international airport and nearby Nairab air base, said the Britain-based Observatory.
The violence in Aleppo comes a year after a massive rebel advance on the city, where both sides have been mired in a stalemate which insurgents have tried to break by infiltrating the regime-held Rashidin district.
Over the past year, insurgents have also fought to take Aleppo's airports, aiming to stop regime warplanes from bombing rebel areas.
The city's international airport has been closed since January.
Tens of thousands of Aleppo residents have fled the fighting which has badly damaged one of the Middle East's richest cities in terms of culture and history.
The Observatory also reported deadly violence on Sunday in the rebel-held village of Suran, in the central province of Hama, where seven civilians were killed in shelling.
It also said that six people were killed in the southern Damascus district of Yarmuk while the opposition National Coalition claimed regime forces had used "chemical weapons" in shelling Yarmuk.
Activists in Suran said all seven victims in Hama were members of the same family who had taken shelter in a makeshift shelter.
Thirteen other family members, six of them children, were also killed in the Mediterranean coastal town of Bayda -- itself the scene of a massacre in May -- and their bodies found on Sunday, the Observatory said.
First three unarmed men were shot dead outside their home in Bayda and "militiamen then broke in, and killed the women and the children," according to Abdel Rahman, who blamed the excesses on sectarian hatred.
It was unclear how the women and children died, Abdel Rahman said. "We have conflicting reports. Some say they were shot dead, others that they were burnt alive."
Elsewhere, the Observatory said that Islamists battling Kurdish fighters in the northern town of Tal Abyad freed 300 Kurdish civilians they were holding prisoner in exchange for a rebel chief.
Imprisoned by Kurdish fighters late on Saturday, jihadist commander Abu Musab was reportedly released on Sunday after a night of heavy clashes between the two sides.
The violence came just days after fighters loyal to the Committees for the Protection of the Kurdish People (YPG) expelled Islamist fighters from the strategic Kurdish town of Ras al-Ain in Hasake province.
On the political front, the new leader of Syria's main opposition coalition, Ahmad Jarba, has been meeting with Egyptian and Saudi leaders ahead of a trip to Paris for talks with French President Francois Hollande.
Newspapers have quoted Jarba as saying his priority is to secure arms for the rebels and that energy-rich Gulf monarchies could set up a $400-million fund to back the opposition coalition.
The Observatory, which relies on a wide network of medics and activists on the ground, estimates that more than 100,000 people have been killed in the war.