The government counteroffensive aims at recapturing areas seized by Syrian rebels and the al-Qaeda-linked Nusra Front, whose recent advances had brought them closer to embattled President Bashar Assad's seat of power.
The south is the last notable foothold of the mainstream, non-jihadist opposition to President Bashar al-Assad, who has consolidated control over much of western Syria after almost four years of civil war.
Sources on both sides of the southern battlefront said the offensive aimed to shield the capital Damascus, a short drive to the north. The insurgents had made significant gains in the south in recent months, taking several military bases.
"The regime wants to lay down a defence line around Damascus," said the rebel, Abu Gaiath, spokesman for the Alwiyat Seif al-Sham group, part of the "Southern Front" rebel alliance that has received support from states opposed to Assad.
Speaking via the Internet from inside Syria, he said his group had a battalion deployed in the battle.
The government late last year lost large parts of the Quneitra region on the edge of the Golan. State television said troops gained control of the town of Deir al-Adas and the village of Deir Maker, as well as the nearby areas of Tal al-Arous and Tal al-Sarjeh.
"The operations are being led by Hezbollah's special forces," said Rami Abdurrahman, who heads the Britain-based Syrian Observatory for Human Rights. "Their aim appears to be to eventually reach areas bordering the occupied Golan and set up a border zone under Hezbollah's control."
The Observatory, which relies on a network of activists around the country, said Iranian volunteers are also taking part in the fighting. It said 20 opposition fighters were killed there on Tuesday alone.
Hezbollah has been fighting alongside forces loyal to Assad, saying it is battling Sunni Islamic extremists who pose a threat to the whole region. Israeli officials accuse Iran, through Hezbollah, of working to establish a base in southern Syria to launch attacks against the Jewish State. Hezbollah denies seeking any military presence there.
On January 18, an airstrike near the Golan – attributed to Israel – killed seven people, including an Iranian general, a top Hezbollah commander and the son of a slain top commander. Hezbollah said the fighters were inspecting positions in the Golan. Part of the strategic plateau was seized by Israel in the 1967 Six Day War.
Although Syrian state television and Hezbollah's Al-Manar satellite channel purportedly reported live from Deir al-Adas, a rebel spokesman said they only captured the town briefly before being forced out.
Gen. Ibrahim Jbawi, a spokesman for the Free Syrian Army's southern front, said the fighting killed or wounded 200 government forces and Hezbollah fighters. He said rebels also destroyed 13 tanks. His report could not be independently confirmed.
"The (Syrian) regime is trying to regain some of its standing" in the area, Jbawi said.
In Damascus, Syrian President Bashar Assad met with UN envoy Staffan de Mistura to discuss his proposal for reducing the violence, starting with a hostilities freeze in the northern city of Aleppo.
Reuters and the Associated Press contributed to this report.