Syria's SANA state news agency reported that "huge masses" demonstrated on Sunday in support of President Bashar al-Assad's regime, voicing opposition to "foreign interference in Syria's internal affairs."
Iraq is trying to mediate an end to nine months of bloody unrest in Syria where the UN estimates that more than 5,000 people have been killed in a regime crackdown on pro-democracy protesters.
On Saturday, Iraqi National Security Adviser Falah al-Fayadh was in Damascus where he said he had "positive" talks with Assad.
He then travelled to Cairo where he met Arab League chief Nabil al-Arabi, and emerged sounding upbeat.
"We had very positive discussions on Sunday with the secretary general of the Arab League, who supported our initiative alongside that of the Arab League in an effort to find a solution between the Syrians," Fayadh said.
The initiative will be led by Iraqi Foreign Minister Hoshyar Zebari who will soon announce further details, he said.
"Our efforts are still continuing to reach a deal between the government and the opposition in Syria," Fayadh said by telephone from Cairo.
"It's too early to speak about the results."
But the minister in charge of Omani foreign affairs appeared certain that a breakthrough could be announced as early as Monday.
"We are optimistic that Syria will join the Arab League and sign the protocol within the next 24 hours," to allow observers on its soil, Yussef bin Alawi told reporters in Riyadh.
Qatari Prime Minister Sheikh Hamad bin Jassem Al-Thani, who chairs an Arab League taskforce on Syria, also said that "we have received information stating that he (Assad) will sign the protocol."
"We'll see if it's true," he said.
Sheikh Hamad, who is also Qatar's foreign minister, said replacing Assad was not the Arab League's concern.
"Assad's resignation or changing the regime involves the people of Syria. What is most important is putting an end to violence and killing, releasing prisoners, and allowing media into the country to uncover the truth", he said.
"What's important is that he (Assad) reconciles with his people," said Sheikh Hamad.
The Arab League has threatened to take Syria to the United Nations for procrastinating over a deal to stop its deadly crackdown on dissent, after Russia proposed a surprise draft resolution to the conflict.
Earlier this month Syria, facing a raft of Arab and Western punitive measures, said it would allow the mission, but set conditions, namely the lifting of Arab sanctions.
Syrian Foreign Minister Walid Muallem is due to hold a news conference on Monday on the crisis engulfing his country.
On the ground, violence raged as army deserters battled loyalist troops, inflicting material and human losses on Assad's forces while more civilians were killed, the Britain-based Observatory said.
An officer was among six loyalist soldiers killed in Qusayr, in Homs province, the group said citing a dissident officer, while clashes between mutinous soldiers and troops continued in Idlib province for a second day.
"Three armoured vehicles were destroyed and those inside were wounded and killed," it said, adding that the heavy exchange in the town of Qusayr led to the "partial destruction of some houses."
Deserters also fired a rocket-propelled grenade at an army checkpoint in a neighbourhood of Homs city, setting it ablaze and killing or wounding those inside, the group said.
At least 15 civilians were also killed by gunfire from regime forces across Syria, half of them in Homs province.
Also on Sunday, regime opponents were wrapping up a three-day congress in Tunis spearheaded by the opposition Syrian National Council aimed at honing a strategy to topple Assad's regime.
Activists also pursued a general strike launched a week ago in many parts of the country, namely in Idlib and the southern province of Daraa, cradle of nine months of anti-regime dissent.
Syrian human rights lawyer Anwar al-Bunni told AFP that Razan Ghazzawi, a blogger arrested on December 5 at the border with Jordan while en route to a press freedom workshop, could be freed on bail later on Sunday.