BEIRUT -- Russian President Vladimir Putin distanced himself further than ever from Syria's embattled leader on Thursday, suggesting that Bashar Assad's regime is growing weaker while warning that his decline could exacerbate the country's crisis.

Putin insisted, however, that Russia's position on the conflict has not changed and that only a negotiated agreement could "prevent a breakup of the country and an endless civil war."

Other Russian officials have made similar statements recently, although Putin's carry much more weight, suggesting that resignation to the idea that Assad could fall extends to the Kremlin's top reaches.

Last week, Russia's top envoy for Syria was quoted as saying Assad's forces were losing control of the country. Although the Foreign Ministry backpedaled on the statement, analysts have suggested for months that Russia's leaders recognize that Assad may fall.

Russia has stood staunchly by Assad throughout the 21-month conflict, providing his forces with weapons and, along with China, protecting his government from censure by the U.N. Security Council for its violent crackdown on the opposition.

His latest comments, however, suggested that Russia realizes Assad's days could be numbered.

"We are not preoccupied that much with the fate of the Assad regime," Putin told reporters during his annual, hours-long press conference in Moscow. "We realize what's going on there and that the family has been in power for 40 years. Undoubtedly, there is a call for changes."

But Putin said the erosion of Assad's regime might extend the war, not end it.

"We are worried about another thing: What happens next," he said. "We don't want to see the opposition come to power and start fighting the government ... so that it goes on forever."

He said Russia does not seek "to keep Assad and his regime in power at any cost," but to foster an agreement among Syrians that "will ensure their safety and their participation in governing the country."

World powers have tried numerous times to push for a political solution in Syria, but neither side has showed any interest in negotiations, both thinking they can win militarily.

The Russian comments came as rebels seeking to drive Assad from power are making gains throughout the country, storming military bases in the north and expanding their control in a string of towns near the capital Damascus, Assad's seat of power.

While few expect the 21-month conflict to end soon, analysts say the balance appears to be tipping in favour of the rebels, however slowly.

Also Thursday, days of intense clashes in a Palestinian refugee community in south Damascus subsided and hundreds residents who had fled returned to their homes after Palestinian leaders negotiated the rebels' exit from the neighbourhood.

About one third of Syria's half-million Palestinians live in the Yarmouk district, and more than 100,000 of them fled the area as rebel forces pushed in and clashed with government troops, activists and U.N. officials said.

Most sought shelter on the neighbourhood's outskirts, while others moved elsewhere in Damascus or to other cities. A few thousand crossed the border to Lebanon, where the United Nations sought to accommodate them in Lebanon's camps.

One refugee said she returned Thursday to find rebels still in the streets.

"I saw damage in Yarmouk street," Zeina Abbas, 42, said by phone from the camp, referring to one of the area's thoroughfares.

Damascus-based Palestinian official Khaled Abdul-Majid told The Associated Press that the exiled leader of the Palestinian group Hamas, Khaled Mashaal, and Islamic Jihad leader Ramadan Abdullah Shallah were negotiating remotely from Cairo to get the remaining rebels out of Yarmouk.

"There are no guarantees from the gunmen," Abdul-Majid, adding that the rebels should go back to their poorer neighbourhoods further south.

Syria's uprising has posed a dilemma for Syria's Palestinian refugees. Assad has long portrayed himself as a champion of their cause and granted them more rights than Palestinians in other Arab countries enjoy.

But as the country descended into civil war, some took up arms with the rebels while others fought for the regime. Last week's clashes began when Syrian rebels enter Yarmouk to back up anti-regime Palestinians fighting pro-regime factions.

On Thursday, several Syria-based Palestinian groups called on Palestinians to return to the camp, saying "it will be a safe area."

Syria's conflict started in March 2011 with political protests and has since become a civil war with scores of armed groups across the country fighting Assad's forces.

The government says the rebels are foreign-backed terrorists who seek to destroy the country. While it does not report on the conflict's death toll, anti-regime activists say more than 40,000 people have been killed.

A new U.N. human rights report said the civil war is increasingly a sectarian conflict between rebels from the country's Sunni Muslim majority and government forces largely supported by the country's religious and ethnic minorities.

The report was released by an independent U.N. commission charged with investigating abuses during the war. It said most of the conflict's victims were civilians and that many were killed by government shell and bomb attacks that appeared "disproportionate" and did not discriminate between fighters and civilians.

It faulted opposition fighters for not differentiating themselves from the civilian population and for executing prisoners.

Sergio Pinheiro, the commission's head, told reporters in Brussels that the rise of foreign fighters in the opposition ranks also raised concerns.

"The commission is extremely worried by the presence of foreign fighters ... who are not fighting for human rights and democracy," he said. "By their own admission, they are very proud of their breaches of humanitarian law."

He also said that continued war will not solve the conflict.

"We think this is a war where no military victory is possible," he said. "It is a great illusion that providing arms to one side or the other will help end it."