With the death toll estimated between 500 and 1,300, what would be the world's most lethal chemical weapons attack since the 1980s prompted an emergency meeting of the UN Security Council in New York.
The council did not explicitly demand a UN investigation of the incident, although it said "clarity" was needed and welcomed UN chief Ban Ki-moon's calls for a prompt investigation by the UN inspection team in Syria, led by Ake Sellstrom.
An earlier Western-drafted statement submitted to the council was not approved. The final version of the statement was watered down to accommodate objections from Russia and China, diplomats said. Moscow and Beijing have vetoed previous Western efforts to impose UN penalties on Assad.
Syrian Information Minister Omran Zoabi said the allegations were "illogical and fabricated". President Bashar al-Assad's officials have said they would never use poison gas against Syrians. The United States and European allies believe Assad's forces have used small amounts of sarin before, hence the current UN visit.
Immediate international action is likely to be limited, with the divisions among major powers that have crippled efforts to quell 2 1/2 years of civil war still much in evidence.
Russia backed up Syrian government denials by saying it looked like a rebel "provocation" to discredit Assad.
Britain voiced the opposite view, "I hope this will wake up some who have supported the Assad regime to realize its murderous and barbaric nature," Foreign Secretary William Hague said on a visit to Paris.
France, Britain, the United States and others called for an immediate on-site investigation by UN chemical weapons inspectors who arrived in the Syrian capital only this week. Moscow, urging an "objective" inquiry, said the very presence of that team suggested government forces were not to blame.
US President Barack Obama has made the use of chemical weapons by Assad's forces a "red line" that in June triggered more US aid to the rebels. But previous, smaller and disputed cases of their deployment have not brought the all-out military intervention rebel leaders have sought to break a stalemate.
US Senator John McCain, a Republican critic of Obama's Syria policy, said on Twitter that failure to penalize previous gas attacks had emboldened Assad, "No consequence for Assad using chemical weapons & crossing red line," he said. "We shouldn't be surprised he's using them again."
The United States and others said it had no independent confirmation that chemical weapons had been used. The UN chief, Ban, said the head of the inspection team in Damascus was already discussing the latest claims with the government.
Opposition activists cited death tolls ranging from about 500 to - by one account - some 1,300 after shells and rockets fell around 3 am (0000 GMT) on Wednesday. In 1988, 3,000 to 5,000 Iraqi Kurds were gassed by Saddam Hussein's forces at Halabja.
One man who said he had retrieved victims in the suburb of Erbin told Reuters: "We would go into a house and everything was in its place. Every person was in their place. They were lying where they had been. They looked like they were asleep."
Doctors interviewed described symptoms they believe point to sarin gas, one of the agents Western powers accuse Damascus of having in an undeclared chemical weapons stockpile.
An opposition monitoring group, citing figures compiled from clinics in the Damascus suburbs, put the death toll at 494, with 90 percent killed by gas, the rest by bombs and conventional arms. The rebel Syrian National Coalition said 650 people died.
Activists said rockets with chemical agents hit the Damascus suburbs of Ain Tarma, Zamalka and Jobar during a fierce pre-dawn bombardment by government forces. The Damascus Media Office said 150 bodies were counted in Hammouriya, 100 in Kfar Batna, 67 in Saqba, 61 in Douma, 76 in Mouadamiya and 40 in Erbin.
A nurse at Douma Emergency Collection facility, Bayan Baker, said, "Many of the casualties are women and children. They arrived with their pupils constricted, cold limbs and foam in their mouths. The doctors say these are typical symptoms of nerve gas victims."
Extensive amateur video and photographs appeared on the Internet showing victims choking, some foaming at the mouth.
A video purportedly shot in the Kafr Batna neighbourhood showed a room filled with more than 90 bodies, many of them children and a few women and elderly men. Most of the bodies appeared ashen or pale but with no visible injuries.
Other footage showed doctors treating people in makeshift clinics. One video showed the bodies of a dozen people lying on the floor of a clinic. A voice-over said they were members of a single family. In a corridor outside lay another five bodies.
Syria is one of just a handful of countries that are not parties to the international treaty that bans chemical weapons, and Western nations believe it has caches of undeclared mustard gas, sarin and VX nerve agents.
Syrian Prez’s forces bombard Damascus suburbs after gas attack, claim activists
Syrian President Bashar al-Assad's forces bombarded rebel-held suburbs of Damascus on Thursday, activists said, keeping up pressure on the besieged region a day after the opposition accused the army of gassing hundreds in a chemical weapons attack.
Rockets fired from multiple launchers and heavy mortar rounds hit the neighbourhoods of Jobar and Zamalka, which are on the eastern outskirts of the capital. Between 500 and 1,300 people died on Wednesday due to chemical weapons attacks in those areas, which are part of Ghouta, the activists said.
Rockets also hit the nearby district of Qaboun to the north, where rebel fighters have repelled attempts by loyalist forces to overrun the area, and the Yarmouk Palestinian refugee camp area to the south, the activists added.
Speaking from Ghouta, activist Khaled Amer said that explosions from rockets hitting Zamalka were being heard. In Jobar, a Damascus neighbourhood only 3 km (2 miles) from the historic centre of the ancient capital, explosions were heard at an army fortification and another compound housing tanks, apparently from a rebel attack on the facilities.
Fadi al-Shami of the Tarhrir al-Sham Brigade, which operates in the eastern Ghouta region, said scattered fighting was taking place along the Jobar-Zamalka axis and that opposition forces have moved closer to loyalist lines, partly to be in safer positions in case of another chemical attack.