Regime war planes and artillery pounded opposition-held areas of the Damascus' suburbs following the rebels' surprise offensive on the capital on Sunday.
The assault saw rebel fighters within striking distance of Abbassid Square in Damascus, just outside the capital's Old City.
Fighting saw damage to the Russian embassy in Damascus, according to the ambassador Alexander Kinshchak, while the opposition stronghold Jobar has been battered by retaliatory air strikes.
"There have been intense air strikes since dawn on opposition-held positions in Jobar from which the offensive was launched," said Rami Abdel Rahman, head of the Syrian Observatory for Human Rights.
"The government and allied forces have retaken the initiative and are striking the groups that launched yesterday's assault."
Observers told The New Arab that the Hayaat Tahrir al-Sham offensive has lost momentum after regime forces were able to regroup.
The assault was partly hampered by Jaish al-Islam's - the largest rebel group in the Damascus' suburbs - decision not to take part in the offensive.
After initial advances by the rebel alliance, the assault was halted by regime counter-offensives and artillery.
Dozens of regime forces were killed in the fighting, and Sunday saw the biggest clashes in Damascus for years.
Tanks and soldiers were deployed to Damascus while the capital's usually bustling streets were dead.
But Syrian rebels managed to link al-Jobar with the al-Qaboun suburb, after pushing regime forces out of an industrial area, opposition media said.
"We have cut the international way of Damascus-Homs, while the street of Fares al-Khori in the heart of Damascus has become under our range of our fire," a commander told pro-opposition Orient News.