Thousands of regime backers massed at a mosque in the Syrian capital Saturday for funeral prayers for policemen killed in a Damascus bombing, as the government vowed to respond with an "iron fist" to security threats.

Coffins bearing 11 policemen, covered with Syrian flags, were brought into the Al-Hassan mosque for the prayers, a day after the explosion ripped through a Damascus intersection, killing 26 people and wounding 63. Officials said the Friday attack was a suicide bombing, the second in two weeks to hit the normally quiet Syrian capital.

The regime of President Bashar Assad has touted the attacks as proof that it is being targeted by "terrorists." But the country's opposition demanded an independent investigation, accusing forces loyal to the Syrian regime of being behind the bombing to tarnish a 10-month-old uprising against Assad. The bombings have coincided with a mission by Arab League observers investigating Syria's crackdown on the protest.

In the hours after the bombing, Syrian troops opened fire on demonstrators holding anti-Assad sit-ins in two parts of the country, killing one and wounding at least 20, activists said. In other shootings Saturday, security forces killed at least six people, activists said.

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A bus for the Syrian riot police forces is seen damaged at the scene of a bombing in the Midan neighbourhood of Damascus, Syria. (SANA/Associated Press)

Friday's blast took place in Damascus' Midan neighbourhood, one of the few parts of the heavily controlled capital that have seen protests against the regime. The Al-Hassan mosque, where Saturday's prayers took place, has been a launching point for anti-government protest marches following weekly prayers.

But on Saturday, it was swamped by Assad supporters.

Thousands of mourners outside the mosque chanted, "Freedom became terrorism. We are not scared of America, the mother of terrorism." Others chanted, "the people want the state of emergency," referring to the decades-old emergency laws that Assad lifted in April as part of reforms he promised.

A group of women wore black shirts emblazoned with Assad's picture, labelled "the Shield of Syria," as policemen lined up to salute their slain comrades.

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Information Minister Adnan Mahmoud told reporters inside the mosque that the explosion "is part of the scheme based on terrorism and killing that has been targeting Syria since nine months."

Dahida Abdul-Rahman, a 50-year-old housewife at the prayers, said the Arab observers should be thrown out of the country. "Since they came, terrorist attacks started," she said.

Two weeks ago, twin suicide bombings hit two intelligence agencies in the capital, killing 44 people.

Friday's blast hit a police bus and damaged a nearby police station, though it was impossible to determine what the exact target was. Afterward, the Interior Ministry, which is in charge of police and security forces, vowed to use an "iron fist" against threats.

The violence marks a dramatic escalation of bloodshed in Syria as Arab League observers tour the country to investigate Assad's bloody crackdown on dissent. The monitoring mission will issue its first findings Sunday at a meeting in Cairo and its chief, Lt. Gen. Mohamed Ahmed Mustafa al-Dabi, is scheduled to leave Syria on Saturday on his way to Egypt to give his report.