The US government dismisses a proposed peace deal from Syrian president Bashar al-Assad as "detached from reality", and urges the Middle East leader to step down.

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In a rare public speech, Mr al-Assad announced what he described as a peace plan and said the opposition were "puppets" of the West.

Appearing in an opera house in central Damascus packed with cheering supporters, the Syrian leader delivered his first speech to an audience since June last year, and his first public comments since a television interview in November.

"The first stage of a political solution would require that regional powers stop funding and arming (the opposition), an end to terrorist operations and controlling the borders," he said, adding: "We will not have dialogue with a puppet made by the West."

His initiative ... would only allow the regime to further perpetuate its bloody oppression of the Syrian people - US State Department

With insurgents fighting their way closer to the seat of his power, President Bashar al Assad spoke about the latest developments and "suffering" in Syria. He said the conflict was not between the state and opposition, but the "nation and its enemies".

"The nation is for all, and we must all protect it," he told supporters.

'Detached from reality'

However, the US State Department dismissed the speech and the proposed peace process as "yet another attempt by the regime to cling to power" and said it "does nothing to advance the Syrian people's goal of a political transition".

"His initiative is detached from reality, undermines the efforts of Joint Special Representative Lakhdar Brahimi, and would only allow the regime to further perpetuate its bloody oppression of the Syrian people," spokeswoman Victoria Nuland said in a statement.

She also repeated longstanding U.S. calls for Assad to step down.

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'Suffering is overwhelming'

The address came as fighting between Syrian rebels and government forces continued to rage across the country. A 21-month uprising against Assad has become a civil war that the United Nations says has killed 60,000 people.

"Just because we have not found a partner, it does not mean we are not interested in a political solution, but that we did not find a partner," Assad said.

"We meet today and suffering is overwhelming Syrian land. There is no place for joy while security and stability are absent on the streets of our country."

Mr Assad called for a "full national mobilisation" to fight against the rebels, whom he branded "terrorists" and "murderous criminals".

They were his first public comments since he dismissed suggestions that he might go into exile to end the civil war, telling Russian television in November that he would "live and die" in Syria.

The speech was denounced by foreign secretary William Hague as "beyond hypocritical".

Mr Hague took to Twitter to vent his anger about the speech, writing: "#AssadSpeech beyond hypocritical. Deaths, violence and oppression engulfing #Syria are his own making, empty promises of reform fool no one."