ALEPPO - Syria's army pushed forward in Aleppo on Sunday as thousands fled rebel-held areas but its forces lost ground to the south where the Islamic State group recaptured the ancient city of Palmyra.

After a sudden withdrawal by regime forces, IS jihadists made a lightning-fast advance across Palmyra, sparking new worries for its remaining ancient treasures.  Forces loyal to President Bashar al-Assad have been focused since mid-November on second city Aleppo, where they have retaken about 85 percent of the one-time rebel bastion in the city's east.

On Sunday, they pounded the shrinking rebel enclave in Aleppo's southeast with artillery and air strikes, seizing a large part of the Maadi district, a monitor said. The Syrian Observatory for Human Rights said more than 10,000 people had fled the remaining rebel-held districts since midnight, heading to government-run west Aleppo and newly retaken areas in the city's north and centre.

An estimated 120,000 people have poured out of east Aleppo since late November, according to the Britain-based monitor. State news agency SANA said at least 4,000 people had fled rebel districts in just hours on Sunday and were taken by bus to temporary shelters. Heavy bombardment on the east could be heard through the night, rattling windows across the city in the west, an AFP correspondent said.

US and Russian officials were expected to continue talks in Geneva Sunday on trying to reach a ceasefire in Aleppo, but a week of intense diplomatic efforts have failed to stem the fighting.

Backing from Moscow, which launched an air war in support of Assad last year, has been crucial in the Syrian army's ability to make gains across the country. Russian raids overnight bolstered Syrian soldiers fighting off an IS offensive on Palmyra, the renowned UNESCO World Heritage site in central Syria.

But the jihadists launched a fresh attack on Sunday, the Observatory said, recapturing all of Palmyra after Syrian armed forces pulled out. "Despite the ongoing air raids, IS retook all of Palmyra after the Syrian army withdrew south of the city," said Observatory head Rami Abdel Rahman.

The IS-linked Amaq news agency also reported that IS regained "full control" of the city on Sunday after taking the citadel, which overlooks Palmyra from a strategic hilltop. Capturing Palmyra from IS in May was considered a major symbolic victory for Assad's forces -- and for its Russian ally.

Russia has come under severe criticism in the West for its continued political and military support for Damascus as the regime pursues its all-out assault on east Aleppo. Moscow says it is consulting with Washington on the terms of a ceasefire in the city after a full rebel withdrawal, but there has been no sign of an agreement so far.

Pope Francis on Sunday made a heartfelt call for an end to violence in Aleppo and across war-ravaged Syria. "I appeal to all to choose civilisation: no to destruction, yes to peace, yes to the people of Aleppo and Syria," he said.

At least 413 civilians have been killed in east Aleppo since the November 15 start of the offensive, according to the Observatory, and 139 killed in rebel rocket fire on the city's west. With such heavy fighting, the retaking of Aleppo by Assad's forces appears to only be a matter of time. "It looks now as if sadly Aleppo will fall," British Defence Secretary Michael Fallon told BBC television on Sunday.

The loss of east Aleppo will deal the biggest blow to Syria's opposition since the start of the country's civil war in 2011. "We're now past the point where the opposition has any hope of pulling things back," said Yezid Sayigh, a senior associate at the Carnegie Middle East Center in Beirut.

Assad "will have in effect broken the back of the armed opposition... and the idea that the regime can be overcome militarily will be finally put to rest." After meetings in Paris on Saturday, Western and Arab powers called for talks between the regime and opposition to end the war. US Secretary of State John Kerry, who called the regime's bombings of Aleppo "war crimes", said the time was ripe for a return to negotiations.

Now that the rebels "are about to lose Aleppo, conceivably... I think the best thing they can do is get to the table and negotiate. Because they can still win a political settlement that honours the fight and all they've invested," Kerry said.