More than 200 bodies, some of them women and children, were found in houses and basements around Daraya, according to activists who said most had been killed execution-style by troops during house-to-house raids.
"Assad's army has committed a massacre in Daraya," said an activist in the town.
The killings in Daraya, a working class Sunni Muslim town that sustained three days of heavy bombardment before being overrun by the army on Friday, raised the daily death toll to 440 people on Saturday, one of the highest since the uprising started in March last year, the Local Co-ordination Committees, an activist network, said.
Video footage from activists showed numerous bodies of young men side-by-side at the Abu Suleiman al Darani mosque in Daraya, many with what looked like gunshot wounds to the head and chest.
"A massacre," said the voice of the man who appeared to be taking the footage. "You are seeing the revenge of Assad's forces ... more than 150 bodies on the floor of this mosque."
The official state news agency said: "Our heroic armed forces cleansed Daraya from remnants of armed terrorist groups who committed crimes against the sons of the town and scared them and sabotaged and destroyed public and private property."
UN investigators said in a report this month that both sides in the conflict had performed summary executions – a war crime – but that Mr Assad's troops and militia loyal to the president had committed many more offences than the rebels.
The report said forces loyal to Mr Assad committed a massacre of more than 100 civilians in the town of Houla in May that the government blamed on Islamist "terrorists".
The United Nations estimates that more than 18,000 people have been killed in the conflict that pits a mainly Sunni opposition against a ruling system dominated by the Assad family, members of the Alawite faith, an offshoot of Shi'ite Islam, for the past four decades.
As well as the bloodshed in Damascus and surrounding cities, many were killed in Syria's biggest city Aleppo where rebel-held areas came under heavy bombardment.
Meanwhile, state television reported clashes between the army and "terrorists" in a central neighbourhood of Aleppo next to the historic Old City and less than a mile away from its ancient citadel.
The Free Hauran Assembly activists' group said that a brigadier named Mohammad Hassan al Haj had defected to Jordan, the latest Sunni officer to desert.
But earlier reports that Vice-President Farouq al Sharaa had defected were shown to be wrong when he appeared in public for the first time in weeks, meeting Iranian officials.
The head of the Arab League, Nabil Elaraby, said both sides of the conflict should stop fighting and start talking.
"Those who wait to achieve a victory in the ongoing conflict in Syria are putting Syria in a big war," he said in Cairo.
"We hope that the sound of reason prevails and that both sides accept mediation efforts."