The Syrian army advanced into the town of Taybet al Imam in Hama province on Thursday, expanding its territory along the strategic western highway between Damascus and Aleppo, the army and rebels said.
The government forces were backed by heavy Russian aerial strikes across a large swathe of territory to the west of the M5 highway held by rebels in their six-year civil war, they said.
The rebels said the army was also joined by Iranian-backed militias in the push into Taybet al Imam, which was seized by rebels last year from forces loyal to President Bashar al-Assad.
Dozens of aerial strikes also hit the nearby towns of Halfaya and Latamneh, which rebels had seized only last month. Their alliance of jihadists alongside moderate Free Syrian Army (FSA) groups have been trying to defend them in recent days.
Sources gave slightly different versions of the current state of the conflict in Taybet al Imam, which lies 18 km (11 miles) north of Hama city.
The British-based Syrian Observatory for Human Rights said the army had now taken the town, after a ground assault this morning that caused losses on both sides after days of heavy bombing.
A rebel source confirmed the army had taken over the western outskirts of Taybet al Imam and said rebels were retreating from parts of the town to cut losses from the heavy aerial bombing.
State media, quoting army sources, said the army was making significant progress in its campaign to take over the town but gave no details.
The media unit of Lebanon's Hezbollah Shi'ite militia said the town had fallen to loyalist forces. It said pro-government militias had pounded rebel outposts with artillery gunfire and rockets.
A rebel commander said Russian jets had escalated their bombing campaign in the area in the past few days, deploying a "scorched earth" strategy using incendiary and phosphorous bombs on civilian areas that had left scores of injured and dead.
"Russian jets are bombing us every second and leaving whole towns in Hama countryside in ruins and totally destroyed. Only after this are regime troops able to make any advance," said Abu Saleh from the Jaish al Izza rebel group.
Thousands of families had fled the fighting in the last few days, he added.
The army's capture earlier this week of Soran, a town just east of the highway, meant government forces had now regained most of the territory that rebels had seized in their major offensive last month in Hama province.
Soran is the army's northern gateway to the city of Hama, the provincial capital, and opposition control of it threatened the city.
The army has its eyes now set on the town of Morek, the next town after Soran going north on the highway crucial to control of western Syria.