Syrian pro-government forces have taken full control of the strategic town of Qusair, state TV and the rebels say.
The town, near the Lebanese border, has been the centre of fighting for more than two weeks between rebels and Syrian troops backed by fighters from the Lebanese militant group Hezbollah.
Syrian state TV said a large number of rebels had died and many had surrendered.
It comes as key rebel leader said his men were ready to fight inside Lebanon.
Gen Selim Idriss of the Free Syrian Army - the main umbrella rebel group - told the BBC that Hezbollah fighters were "invading" Syria and Lebanon was doing nothing to stop them.
Syrian pro-government forces, including Hezbollah fighters, have been battling rebels for control of Qusair for more than two weeks.
The town lies just 10km (six miles) from the Lebanese border and along major supply routes.
But on Wednesday, Syria's Sana state news agency said the "heroic armed forces have returned security and stability to all of the town".
Sana said a large number of "terrorists", as the state refers to the rebels, had been killed and many had surrendered. It said the army was now destroying barricades and weapons caches and searching the town for explosives.
In Lebanon, Hezbollah's Al-Manar TV reported "widespread collapse" of the rebel forces in the town, while one Hezbollah fighter told Reuters news agency: "We did a sudden surprise attack in the early hours and entered the town. They escaped."
In a statement also quoted by Reuters, the rebels said: "In face of this huge arsenal and lack supplies and the blatant intervention of Hezbollah... tens of fighters stayed behind and ensured the withdrawal of their comrades along with the civilians."
AFP news agency quoted the British-based Syrian Observatory for Human Rights, an activist group that monitors the conflict, as saying Hezbollah fighters were in control of the town.
'Brutality'
The BBC's Jim Muir in Beirut says there are still some pockets of rebel resistance in rebel hands to the north of Qusair, but that the government is hailing its recapture as a strategic victory.
It is likely to cut supply routes to rebels still in control of parts of the centre of the country, and so weaken their hold.
The move is also of symbolic importance in the run-up to a proposed peace conference backed by Russia and the US as neither side wants to go into the talks looking weak, our correspondent adds.
Last week, the Red Cross said it was "alarmed" by the worsening humanitarian situation in Qusair and appeal for immediate aid access.
More than 80,000 people have been been killed in Syria and more than 1.5 million have fled the country since an uprising against Mr Assad began in 2011, according to UN estimates.
The UN reported on Tuesday that the war had reached "new levels of brutality", with evidence of massacres and children being taken hostage of forced to witness - sometimes participate in - atrocities.
There is also growing evidence that chemical weapons have been deployed in the conflict.
France's Foreign Minister Laurent Fabius said on Tuesday that samples taken from Syria and tested in France showed the presence of sarin, and that there was "no doubt that it's the regime and its accomplices" that were responsible.
Mr Fabius did not specify where the samples had been collected, but French media reported it had been from the northern town of Saraqeb.
The BBC was shown evidence last month which appeared to corroborate reports that government helicopters had dropped at least two devices containing poisonous gas on the town on 29 April.
The UK also says it has tested samples which give evidence of the use of sarin in Syria.
Both the Syrian government and the rebels have in the past accused each other of using the weapons
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