QUSAIR, Syria - Syrian government forces and their Lebanese Hezbollah allies seized control of the border town of Qusair on Wednesday, dealing a major defeat to rebel fighters battling to overthrow President Bashar al-Assad.

Two weeks of heavy fighting reduced many buildings to mounds of twisted concrete, whole blocks flattened by shelling, with glass and rubble littering the streets as tired but delighted Syrian soldiers gathered at the bullet-riddled clock tower.

"We will not hesitate to crush with an iron fist those who attack us. ... Their fate is surrender or death," the Syrian armed forces command said in statement. "We will continue our string of victories until we regain every inch of Syrian land."

An opposition group from the town said more than 500 rebels had died in two weeks of fighting, with a further 1,000 wounded, leaving just 400 outgunned men struggling to hold onto the town.

Facing determined Hezbollah guerrillas from neighboring Lebanon, who swung the fight Assad's way, the survivors decided to escape in the night through a corridor that the attackers said they had deliberately left open to encourage flight.

Some bodies lay in the street -- at least three men, sporting long beards, appeared to have been executed.

Qusair lies on a cross-border supply route with Lebanon, and its capture secures an important corridor through the central province of Homs which links Damascus to the coastal heartland of Assad's minority Alawite sect, an offshoot of Shi'ite Islam.

Bolstered by his Iranian and Russian backers, Assad's forces have launched a series of counter-offensives in recent weeks against mainly Sunni Muslim rebels battling to overthrow him and end his minority Alawite family's four-decade grip on power.

A member of a pro-Assad Syrian militia said the military focus may now move to the northern province of Aleppo, which has been largely in rebel hands for the last year.

Assad's upturn in fortunes could further diminish hopes of concessions at a peace conference the United States and Russia are seeking to convene, with Damascus increasingly confident of success against a ragtag opposition that is short of weapons.

"Whoever controls Qusair controls the center of the country, and whoever controls the center of the country controls all of Syria," said Syrian Brigadier-General Yahya Suleiman, speaking to Beirut-based Mayadeen television.

ESCAPE ROUTE

More than 80,000 people have been killed since the Syrian revolt erupted in March 2011, and 1.6 million refugees have fled a conflict which has fuelled sectarian tensions across the Middle East, spilled over into Lebanon and divided world powers.

U.S. and Russian officials met the U.N.-Arab League envoy for Syria, Lakhdar Brahimi, in Geneva on Wednesday to discuss plans for the planned peace conference.

Originally set for this month, Russia's deputy foreign minister said the talks would not take place before July, with some issues still unresolved, including who would take part.

Brahimi said the talks may possibly be held next month. The only sticking point was that neither side was ready to attend.

Syrian artillery and aircraft had pounded Qusair in recent days and humanitarian agencies warned earlier this week that as many as 1,500 wounded were trapped in the town. Their fate was not immediately clear.

The International Committee of the Red Cross said it hoped to gain access to Qusair to deliver food and medical aid to civilians. Syrian authorities had told the ICRC this week that its aid workers could enter once military operations were over.

The rebels said in a statement they had pulled out "in face of this huge arsenal and a lack of supplies and the blatant intervention of Hezbollah".

An opposition group called the 'Qusair Revolution' posted a statement on Facebook about what it said were the lessons learnt from the battle, accusing political exiles of ignoring them and some militia chiefs of worrying more about money than fighting.

"There are battalion leaders in this revolution whose profession has become profit. They do not move unless they have gotten enough money for their weapons and ammunitions paid for."

A security source with ties to Syrian forces said Assad's troops had left an escape route into nearby Debaa and the Lebanese border town of Arsal to encourage rebel fighters to quit Qusair, once home to 30,000 people.

"We are heading now to crush Debaa," a Syrian soldier said on the streets of Qusair, which were empty of civilians.

On the road into Qusair, street after street lay in ruins, windows blown out, facades crumbled and the trees all blackened and burnt. The dome of the local mosque was damaged by rocket fire and the walls of a church smashed open.

A rebel commander in contact with the brigades that retreated said the decision to withdraw was taken after a day of rocket fire from the Syrian army and Hezbollah that "leveled what had remained" of Qusair.

In the Hezbollah stronghold of southern Beirut, residents set off celebratory fireworks as news of Qusair's fall spread.

In the Lebanese town of Qasr close to Syria, crowds waved Hezbollah and Syrian flags in jubilation. Locals distributed sweets to mark the rebel defeat just across the border.

A senior Lebanese political source close to Hezbollah said the victory was a strategic success that would boost the morale of Assad's allies. He suggested that Hezbollah would not necessarily intervene directly in other battles but might offer indirect help to the Syrian army.

"The battle will continue in all regions, but I believe Aleppo (will be) first," he said.

Underlining a possible further spillover of the conflict into Lebanon, the commander of the rebel Free Syria Army warned that it might target Hezbollah on its home turf.

"Hezbollah fighters are invading Syrian territory. And when they continue to do that and the Lebanese authorities don't take any action to stop them coming to Syria, I think we are allowed to fight Hezbollah fighters inside (Lebanese) territory," Salim Idriss told the BBC. (Reuters)