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Opposition groups in Syria on Tuesday said up to 400 bodies had been found in the town of Daraya, south-west of the capital Damascus, in what appears to be the worst single massacre by government forces in the country's 17-month-old civil war.

At least 200 bodies were found among the Sunni community on Saturday, after Syrian troops stormed the town and carried out house-to-house searches. On Tuesday following the army's withdrawal residents reported the death toll was higher. They said that government troops and pro-government shabiha militia raided some streets 'two or three times', in some cases demanding hospitality and then killing their hosts when they left.

"The total number in Daraya so far is 400 bodies. The number of bodies buried unidentified is more than 100," one resident, Abu Kinan, told the Guardian on Tuesday via Skype. He added: "One of the massacre survivors told me that when the Syrian army stormed their alley, they put more than 50 people up against the wall. As they began spraying them with bullets, he threw himself to the floor. He was covered with blood though he was not shot. He pretended that he was dead. Four of his family were killed."

The claim came after little sign of diplomatic progress on Syria. On Monday, France's president François Hollande urged Syria's divided opposition to form a provisional government, saying Paris was ready to recognise it. On Tuesday, however, US officials dismissed the move as premature.

Kinan said the army remained in Daraya for two-and-a-half days. In this time government troops combed the district – followed by Shabiha "death squads". The siege of Daraya had now eased, he added, with some roads open again, and the wounded able to travel to hospitals. "We are still finding bodies," he said. Another resident, Abu Mua'tasim, added: "The Syrian army stayed in some of the houses. One belonged to my friend. People were forced to serve them food and tea. Just before they were leaving they killed the people in the house …I know the family."

President Bashar al-Assad's regime has portrayed the killing in Daraya as a counter-terrorism operation, saying it cleansed the area of "terrorists".

Human rights groups and locals say many of the dead were civilians. The operation follows a pattern seen previously, with the Syrian army first encircling an area known to be hostile to the regime, shelling it for a period of days, and then sending in troops house to house.

Activists in the nearby al-Qadam district said they feared they would be next.

On Tuesday they discovered the bodies of five local men dumped near the mosque. The al-Qadam victims had been stabbed and shot at point-blank range. Two of the bodies had smashed heads, graphic video footage showed. "There are many [government] checkpoints at the outskirts of al-Qadam district. Most of the people disappeared at these checkpoints,' one resident, Abu Hamza, told the Guardian via Skype.

Hamza, said that 150 people had been wounded from shelling by tanks on the highway over the past three weeks. He said the Syrian army and shabiha militias had taken up positions in the police and train stations. said the rebel Free Syrian Army (FSA) was encamped in orchards outside town, he said.

Hamza added: "This isn't the first time we have found bodies. During August we found more than 25 – sometimes four, sometimes six [at a time]. The discovery of these slaughtered bodies has made people in al-Qadam district flee. The population in more than 300,000 but over the past two weeks 90 per cent of the people have fled."

He went on: "People are scared of repeated massacres. The big problem we have here is that Alawite districts surround al-Qadam district ... The five bodies we found today are of men aged between 25 and 45. People were able to identify two of them, a body beloning to Anass Ahmed and another, of Ziyad Abdulwah al-Masseri."

In Damascus, at least 12 people died and dozens were wounded when a car bomb exploded at the funeral of two supporters of President Bashar al-Assad. The explosion took place in a Druze cemetry at the Jaramana district of south-east Damascus. Syrian state TV blamed the attack on the rebels and said 48 people had been injured in a "terrorist car bombing".

Elsewhere in the city, government forces shelled several districts, including the Ghouta suburbs in the east, according to video footage. Clashes have been going on in Damascus for over a month with Assad's regime stepping up its efforts to wipe out resistance. Syrian military helicopters also dumped hundreds of leaflets over the capital and its suburbs, urging rebels to hand in their weapons, the Associated Press reported.

The leaflets, signed by the armed forces and the army's general command, read: "The Syrian army is determined to cleanse every inch in Syria and you have only two choices: Abandon your weapons ... or face inevitable death.

"No one will help you. They have implicated you in taking up arms against your compatriots," they read. "They drown in their pleasures while you face death. Why? And for whom?"

The deteriorating situation inside Syria has prompted a fresh exodus of refugees. On Tuesday the UN refugee agency said the number of Syrian refugees in Turkey could reach 200,000, with others fleeing to neighbouring Jordan.

"The increase in the number of Syrians arriving in Turkey has been dramatic. Compared to previous weeks in which we saw about 400-500 people arriving a day, we've been seeing peaks of up to 5,000 people in one day over the past two weeks," Melissa Fleming, chief spokeswoman for the UN High Commissioner for Refugees (UNHCR), told a news briefing.

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