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Syria's opposition says the once-bustling commercial capital of Aleppo might soon fall victim to a crushing siege if government troop advances continue unabated, CNN reported.

Fears of encirclement rose after the Syrian army, backed by pro-government militias, wrested control of the Sheikh Najjar neighborhood and the nearby village of Kafr Saghir, a strategic industrial area at the northeastern entrance to Aleppo city.

Government troops also advanced toward central Aleppo from the western suburbs, most of which it controls, including the Hamdaniya district along the key Damascus-Aleppo Highway.

Rebels called the defeats a strategic withdrawal and announced the formation of a 600-strong elite force to combat the escalating offensive, the opposition-run Aleppo Media Center reported.

The Syrian military is focused on capturing the Handaraat settlement, which links the opposition-controlled neighborhoods of Aleppo city with the Turkish border. If successful, the Syrian government will be in a position to besiege an estimated 300,000 civilians and isolate fighters from a vital supply line, the Aleppo Provincial Council tells CNN.

"The rebels are fortifying themselves on the edge of the city" Mohammed Wisam, a spokesman for the Aleppo Media Center told CNN, "but residents fear a siege."

Fighters from the National Defense Forces, a Syrian paramilitary group, and the Lebanese Shiite militia Hezbollah arrived in Aleppo ahead of what activists believe will be a full-scale assault on Handaraat.

"This will be the route to death," Abdul Rahman Dadam, head of Aleppo's Provincial Council, tells CNN, "The humanitarian crisis will be huge, and the civilians will pay the price."