ALEPPO, Syria — UN chief Ban Ki-moon expressed alarm over reports of atrocities against civilians Monday, as the battle for Aleppo entered its final phase with Syrian government forces on the verge of retaking rebel-held areas of the city.

"The secretary-general is alarmed over reports of atrocities against a large number of civilians, including women and children, in recent hours in Aleppo," his spokesman Stephane Dujarric said.

"While stressing that the United Nations is not able to independently verify these reports, the secretary-general is conveying his grave concern to the relevant parties."

Syrian government forces said the battle for the key northern city was in its "final phase" after rebels retreated into a small pocket of their former bastion in the face of new army advances.

President Bashar al-Assad’s forces held more than 90 per cent of the onetime opposition stronghold of east Aleppo, a monitor and military official said.

The fall of Aleppo would be the worst rebel defeat since Syria’s conflict began in 2011, and leave the government in control of the country’s five major cities.

A Syrian military official in Aleppo said late Monday: "We’re living the final moments before victory."

"The operation in eastern neighbourhoods is entering its final phase", he said earlier, as fierce clashes were reported in the few districts still under rebel control.

An AFP correspondent in government-held west Aleppo said celebratory gunfire could be heard late Monday.

State television showed people celebrating, holding up portraits of Assad and Syrian flags.

"Aleppo residents express their joy at the victory against the terrorists", read a caption beneath the footage, referring to the rebels.

The Syrian Observatory for Human Rights monitor reported the army had captured southeast Aleppo’s large Sheikh Saeed district.

Syrian official media confirmed Sheikh Saeed had been retaken, with state television showing what it said was live footage from the neighbourhood.

The rebels withdrew from six more districts as government troops advanced, the Britain-based Observatory said.

The retreat leaves opposition fighters confined to just a handful of neighbourhoods in southeast Aleppo, the largest of them Sukkari and Mashhad.

"A total collapse"

"The battle of Aleppo has reached its end. It is just a matter of a small period of time... it’s a total collapse," said Observatory director Rami Abdel Rahman.

In the Mashhad neighbourhood, residents fleeing the army advance crowded the streets earlier Monday, witnesses said.

Displaced civilians -- many hungry after fleeing without food -- sat on pavements or lay on the street with nowhere else to go, they said.

The AFP reporter said the bombardment of rebel areas was among the heaviest in recent days.

"The regime is advancing in east Aleppo under gunfire, missiles and shelling," Bassam Mustafa from the political office of the Nureddin al-Zinki rebel group in Aleppo said.

"The fighters (rebels) are retreating under pressure and the situation is very bad," he said.

State television also aired live footage from inside Salhin district, one of the areas fully retaken on Monday, showing widespread destruction.

Terrified residents have poured out of rebel-held neighbourhoods as the army advanced since beginning its operation on November 15.

The Observatory said Monday another 10,000 people had fled rebel areas in the previous 24 hours, bringing the total number of those who have left -- mostly to government-held territory -- to 130,000.

Syria’s rebels seized control of east Aleppo in 2012, a year into an uprising that began with anti-government protests but spiralled into a complex multi-front conflict, drawing in proxy powers and jihadists such as the Islamic State group.

IS retakes Palmyra

On Sunday, IS retook the symbolically important city of Palmyra nine months after being expelled from the UNESCO World Heritage site, despite heavy Russian air strikes and the arrival of Syrian reinforcements.

On Monday, the jihadists were advancing south and west of Palmyra, the Observatory said.

Meanwhile, air strikes on the group’s de facto Syrian capital of Raqa killed at least 21 civilians, while raids on IS-held villages in Hama province left at least 53 dead.

More than 300,000 people have been killed in Syria’s war, and more than half the population displaced.

The government assault on Aleppo has killed at least 415 civilians since mid-November, the Observatory says, while another 130 civilians have been slain in rebel fire on the city’s west over the same period.

Diplomatic efforts to end the conflict have repeatedly failed.

Russia last week said talks were under way with US officials on securing a ceasefire and the withdrawal of all rebel forces from Aleppo.

But despite several high-level meetings there was no progress in halting the fighting.

Moscow is a key Assad ally and launched an air war in support of his forces last year, while Washington and other Western nations have backed rebel forces. — AFP