Syria’s cabinet has resigned in an effort to counter the wave of protests calling for political reform. Muhammad Naji al-Otari, the outgoing prime minister who has held the post since 2003, will act as the caretaker prime minister until a new government is formed.

Continuing the government’s policy of combining promises of concessions with brutal repression, security and armed forces have maintained their positions outside the two main centres of anti-government protests, Dara’a and Latakia.

On Monday, the army fired live ammunition into the air to disperse hundreds of demonstrators in Dara’a, the southern city that has been the scene of angry demonstrations following the arrests of 15 schoolchildren on March 6 for writing anti-regime graffiti on walls. While the youths were released last week, the protests have grown in size as anger mounted over the killing of at least 61 people over the last 10 days at the hands of the security forces.

The demonstrators in this largely Sunni Muslim city marched into the main square and took up positions for the night. One of their slogans was, “Not Sunnis, not Alawis, we all want freedom”, a rejection of attempts to whip up sectarianism. Syria is ruled by a small clique around President Bashad al-Assad’s family who are from the small Alawite sect and are supported by other minorities that make up a further 25 percent of the population, which is majority Sunni Muslim.

Demonstrators called for reforms, rather than the downfall of the Assad regime, and rejected any outside intervention, shouting, “God, Syria and freedom only”. They are demanding the release of political prisoners, the arrest of officials responsible for the crackdown that killed and injured scores of people, and an end to the emergency laws. They have called for Assad to allow freedom of speech and assembly and rein in Syria’s security services.

The army is still deployed in the port city of Latakia, which has seen several days of violence with up to 20 people killed and 100 hospitalised. On Saturday, protesters set fire to and destroyed the offices of the ruling Ba’ath Party and SyriaTel, the telecoms company owned by Rami Makhlouf, President Bashar Assad’s cousin, a symbol of government corruption.

The government accused armed gangs of foreigners and Muslim fundamentalists of bringing in weapons and causing unrest the city, with state television showing interviews with injured policemen in hospital. Although the city has been largely quiet since the weekend, there have been sporadic clashes between pro and anti-government groups armed with rifles and knives.

Following demonstrations of thousands last Saturday in the four largest cities, Damascus, Aleppo, Homs and Hama, and unrest in Tafas and Douma, both near Damascus, where hundreds of people were arrested, the government called for demonstrations on Tuesday in support of the regime. Thousands of people responded and marched into Damascus’ Sabeh Bahrat square, shouting, “Only God, Syria, and Bashar! With our soul, with our blood, we will redeem you, Bashar”. There have been similar demonstrations in most other cities except Dara’a and Latakia.

The BBC reported that the new government is expected to include individuals from outside the Ba’ath Party. However, since the government is only a fig leaf for the real power, which is concentrated in the hands of Assad, his extended family circle, the leading merchant and industrial families and the security apparatus, a new government will make little difference.

Assad, who has largely been invisible throughout the unrest, heads a bitterly divided regime. While some favour reforms to buy off the protesters, the army and security forces want a harsh crackdown. Assad is expected to address the nation later, possibly announcing the repeal of the emergency laws through which the Ba’ath Party has ruled since it came to power in 1963, and the ban on any parties independent of the Baath-led National Progressive Front, as he promised last week. That too will have little more than symbolic significance, since Syria has many other laws that would outlaw the political freedoms that demonstrators are calling for.

The resignation of the government follows the release of more than 260 prisoners, mainly Islamists nearing the end of their jail terms, from Seidnaya prison, near Damascus, as well as a smaller number arrested recently in Dara’a. But it is unlikely that these measures will calm the mounting anger over the death toll, and there is talk of a bigger “day of rage” next Friday.

The unrest in Syria, which is the linchpin of the relationship between Iran and Hezbollah in neighbouring Lebanon, threatens to destabilise the entire region.

The assertions of the Assad regime that foreign powers are seeking to take advantage of the political turmoil cannot be simply dismissed. Syria has long been the focus, along with Lebanon, of Washington’s efforts to isolate Tehran, which it views as a threat to its hegemony in the oil-rich region, while Israel has also sought to influence Syria to the same end.

This has involved a carrot and stick approach, with Israel offering Syria deals involving final and permanent control of the Golan Heights alongside flyovers of Syria and threatening retaliation against Damascus should Hezbollah fire rockets on Israel.

Leading neo-cons in the US have called for intervention in Syria, but Secretary of State Hilary Clinton has ruled this out at this point, with Washington limiting its official position to calls on Assad to implement reforms.

The New York Times published an analysis Sunday expressing concern that the deepening of chaos in Syria “could dash any remaining hopes for a Middle East peace agreement”, alter the US rivalry with Iran for influence in the region and pose challenges for the United States’ greatest ally in the region, Israel”.

US officials were “pulled between fears that the country’s problems could destabilize neighbouring states such as Lebanon and Israel, and the hope that it could seriously weaken one of Iran’s key allies”, the newspaper observed.

In Lebanon, the Shia Islamist group Hezbollah and its allies forced the resignation of the pro-Washington Saad Hariri coalition government in January and nominated Najib Mikati to form a new government. It was the first time that Hezbollah has determined the choice of a Lebanese premier and was a major setback for Washington and Tel Aviv.

As yet, Mikati has not been able to form a government, and Hariri, hoping to capitalise on the unrest in Syria, has played the sectarian card. Hariri called Hezbollah an agent of a foreign power, and called for anti-Hezbollah rallies.

While Hassan Nasrallah, the Hezbollah leader, encouraged the Arab people in Egypt, the Maghreb and the Gulf to rebel against their corrupt leaders, in Syria he has backed his patron Assad against the protesters.

There have also been independent rallies of some tens of thousands of people and sit-ins in Beirut, opposing Lebanon’s free market policies and calling for unity and political reforms to end the sectarian basis of government.

With Damascus acting as home to Hamas leader Khaled Maashal, Israel may feel emboldened to take advantage of the Syrian unrest and launch a war on Hamas in Gaza, Hezbollah in Lebanon and possibly even mount a direct challenge to Syria itself.

Turkey, for its part, has urged Syria to make concessions to the protesters. As well as fearing the impact of any prolonged unrest on the economic relations it has sought to foster with Lebanon, Syria and Jordan, Ankara fears that Syria’s Kurds in the drought-stricken north-east of the country will join the protests and spark Kurdish unrest in Turkey.