Assad appointed Wael al-Halki, a Sunni Muslim from the southern province of Deraa where the Syrian uprising erupted 17 months ago, to head the government after Riyad Hijab fled on Monday after spending only two months in the job.
Hijab's dramatic escape across the border to Jordan dealt another blow to Assad's authority, already shaken by the assassination last month of four of his top security officials and by rebel gains in Damascus, Aleppo and swathes of rural Syria.
Assad has shrugged off the setbacks and persevered with a desperate contest with his mostly Sunni opponents, who are seeking to end half a century of Baathist rule and topple a system dominated by members of the president's minority Alawite sect.
He has focused his fierce army counter-offensive on Syria's two main cities, reasserting control over much of Damascus before taking the fight to the northern commercial hub.
Rebels fighting in the Aleppo district of Salaheddine, a southern gateway to the city, said they had been forced to fall back from frontline positions on Thursday by a fierce bombardment which had reduced buildings to rubble.
"There have been some withdrawals of Free Syrian Army fighters from Salaheddine," rebel commander Abu Ali said. Others said the main frontlines in the area, which had been held by rebels for more than a week, were now deserted.
The centre of the district, near Salaheddine mosque, was abandoned when Reuters journalists visited on Thursday. The only sound was the constant echo of artillery shelling. There were no rebels, no security forces, and only a few residents darting in and out to pick up belongings - while evading army snipers.
Rebels stopped a man trying to go and check on his house. "They are targeting anyone they see. Go back for your safety for God's sake," said one rebel to the man, who turned back.
The streets were covered in glass and rubble. Cars had been smashed by falling debris and the stench of uncollected rubbish and dead bodies permeated the area.
One rebel field commander, who did not want to be named, said 250 people had been killed in Salaheddine in the last three days, mostly by shelling and air attacks.
As the battle for Aleppo raged, Iran, Assad's closest foreign backer, gathered ministers from like-minded states for talks about how to end the conflict.
Foreign Minister Ali Akbar Salehi called for "serious and inclusive" talks between the Syrian government and opposition groups. Assad has repeatedly said he is ready for dialogue, but has vowed to crush the armed rebels he says are terrorists.
Assad's opponents say he must step aside before they enter into talks, saying negotiations would be meaningless while the bloodshed persists.
AIR ATTACK
Assad cannot afford to lose Aleppo if he is to remain a credible national leader. Already stretched by rebel activity in many parts of the country, the military, despite its advantage in tanks, warplanes and helicopters, has had to cede ground elsewhere as it struggles for control of Syria's biggest city.
As part of a broader army offensive, Assad's forces attacked rebels on several fronts including a neighbourhood near the airport in southeast Aleppo, several eastern districts, and a town on Aleppo's northwestern outskirts, state media said.
Despite the violence, the Red Cross delivered food and medical supplies to Aleppo, the first time one of its aid convoys managed to enter the city in several weeks.
Reuters journalists in Tel Rifaat, 35 km (20 miles) north of Aleppo, watched a Syrian air force jet diving and firing rockets, causing villagers to flee in panic.
Explosions rang out and black smoke billowed from an olive grove. A truck was engulfed in flames. Six children and a crying woman fled their tiny home. One woman held the Koran above her head, kissing it, and another banged her head with her hands. Men stared at the sky and threw their arms up in despair.
Though sympathetic to the rebels, Western powers, Turkey and Sunni Arab states have not intervened militarily. Russia and China have blocked United Nations action against Assad, while Iran has tried to bolster the Syrian leader in an Arab world where many view non-Arab, Shi'ite Iran as a menace.
TEHRAN MEETING
Iranian President Mahmoud Ahmadinejad billed the Tehran meeting of a dozen countries as an opportunity "to replace military clashes with political, indigenous approaches to settle the disputes". Those attending would have "a correct and realistic position" on the Syrian conflict, a senior Iranian diplomat said this week, indicating a one-sided discussion.
"The Islamic Republic's support for Assad's regime is hardly compatible with a genuine attempt at conciliation between the parties," said one Western diplomat based in Tehran. It showed Iran was "running out of ideas", he added.
Syrian rebels, who have accused Iran of sending fighters to help Assad's forces, seized 48 Iranians in Syria on Aug. 4, saying they were members of Iran's Revolutionary Guards.
An Iranian Foreign Ministry official said on Thursday that all the prisoners were alive, contrary to statements by their captors that three had been killed in an air raid.
Foreign Minister Salehi has acknowledged that some of the men were retired soldiers or Revolutionary Guards, but said they were religious pilgrims, not combatants.
Damascus and Tehran accuse Turkey, Saudi Arabia, Qatar and Western nations of stoking violence by backing Syrian rebels.
Turkey's foreign minister accused Syria in turn of arming the Kurdistan Worker Party (PKK) a Kurdish militant group that has fought the Turkish state for decades.
"Assad gave them weapons support. Yes - this is not a fantasy. It is true. We have taken necessary measures against," Foreign Minister Ahmet Davutoglu told Turkish media.
The Syrian Observatory for Human Rights, a British-based opposition watchdog, said more than 70 people had been killed across Syria on Thursday. It put Wednesday's death toll at 170, including 33 civilians in Aleppo.
The violence in Syria has forced tens of thousands of people to flee into neighbouring countries, and about 2,400 refugees, including two generals, arrived in Turkey on Tuesday night.
Near the Syrian border town of al-Dana, a crowd of refugees from Aleppo piled through a frontier fence as Turkish soldiers tried to keep order. "We could not endure any more," Ahmad Shaaban, a grocer from Salaheddine, told Reuters.
"We have been deprived of everything. They have burnt our homes and have deprived us of our livelihood."
