A ferocious battle on the outskirts of the northern city of Raqa, near the Turkish border, killed dozens of Syrian troops and rebel fighters on Saturday, a watchdog reported.

"Fierce clashes pitting rebel fighters from several battalions against regular troops have raged since dawn on the outskirts of Raqa city," said the Syrian Observatory for Human Rights.

"Army troops shelled several city neighbourhoods, as well as the outskirts, while the clashes left dozens of troops and rebels dead," the Britain-based group said without giving exact numbers.

"Explosions could be heard in the city, and towers of smoke could be seen rising into the sky.

Both the Observatory and activists in Raqa said the army was using helicopters to strafe rebels in some parts of the city, in a rare escalation of violence in the provincial capital.

Raqa city is strategically located near Syria's northern border with Turkey. Residents say it has become home to thousands of people forced to flee their homes in other war-torn parts of Syria.

"A large number of people were forced by mortar attacks on their district to flee their homes in the Masaken Shuhada area" of the city, said Observatory director Rami Abdel Rahman.

"Because of the large number of civilians who have sought shelter in Raqa from other parts of Syria, the rebel Free Syrian Army had an agreement not to assault the city. Saturday's battle was a rare but intense escalation," he said, as cited by international media.