Rockets fired on a market in a government-controlled area of Damascus killed 35 people and wounded more than 20 others, Syrian state-run media has said.
The government blamed rebels in the eastern suburbs of Damascus for the attack on the Kashkol neighbourhood.
The capital, seat of President Bashar Assad's power, has come under increasing attack as government forces continue to pound rebel-held eastern Ghouta, with military backing from Russia.
With government forces tied up in the offensive on eastern Ghouta, Islamic State militants seized a neighbourhood on its southern edge, forcing the government to rush in reinforcements.
IS militants captured the neighbourhood of Qadam late on Monday, a week after rebels had surrendered it to the government.
At least 36 soldiers and pro-government militiamen were killed in the clashes, according to the Britain-based Syrian Observatory for Human Rights. It said dozens more were captured or wounded.
Last year, the Islamic State group lost the area of territory it had controlled in eastern Syria since 2014 - and where it had proclaimed its self-styled "caliphate" - but it retains pockets of control in areas across Syria, including two neighbourhoods on the southern edge of Damascus.
The government's assault on eastern Ghouta has displaced 45,000 people, the United Nations said on Tuesday, while tens of thousands more are living in desperate conditions in northern Syria, where a Turkish military campaign is underway.
In eastern Ghouta, rescue workers were still retrieving bodies from the basement of a school that was bombed on Monday by government or Russian jets, a spokesman for the Syrian Civil Defence group said.
- Press Association & Digital Desk