Gen Robert Mood: "We stand ready to work with all parties to assist with bringing an end to the violence"
The head of the UN Stabilisation Mission in Syria (UNSMIS) says the mission has been suspended because of escalating violence.
Norwegian Gen Robert Mood said the observers would cease patrols and stay in their current locations.But he said the mission remained committed to ending the violence.
The announcement comes a day after Gen Mood warned that the escalation in violence was limiting the observers' ability to do their work.
The BBC's Jim Muir in neighbouring Lebanon says the statement is a recognition that international envoy Kofi Annan's peace plan has hit the rocks, and greatly increases the pressure on international diplomacy to salvage it.
Earlier, activists said troops had been shelling parts of Homs and Damascus.
At least seven people were killed overnight in Douma, an eastern suburb of the capital, while at least 18 others died in violence elsewhere, the UK-based Syrian Observatory for Human Rights reported.
The Observatory also warned of civilians trapped by fighting in Homs who needed medical care - dozens needed to be evacuated.
Civilians 'suffering'
The UN estimates that the conflict in Syria has left more than 10,000 people dead, mostly civilians
"This suspension will be reviewed on a daily basis. Operations will resume when we see the situation fit for us to carry out our mandated activities," he said, adding that a "return to normal operations remains our objective".
The mission's 298 military observers and 112 civilian staff are in Syria to verify the implementation of the six-point peace plan negotiated by the UN and Arab League envoy, Kofi Annan, which included a ceasefire.
On Friday, Gen Mood told a news conference in Damascus that after the mission began on 29 April there had been a lull in violence, "brought about willingly" by the government and rebels.
But he warned: "Violence over the past 10 days has been intensifying, again willingly by both parties, with losses on both sides and significant risks to our observers."
"The Syrian population, civilians, are suffering and in some locations, civilians have been trapped by ongoing operations."
The general noted both sides had accepted Mr Annan's plan, but said: "There appears to be a lack of willingness to seek a peaceful transition.
"Instead there appears to be a push towards advancing military positions," he added.
Gen Mood warned that the UN mission was not open-ended and would be under review as it neared the expiry of its current mandate in July. But he hinted that it should be strengthened in numbers and equipment.
Last Tuesday UN monitors were fired on and turned away by angry residents as they tried to enter the town of Haffa amid fears of a massacre. They were able to return on Friday.
The UN says at least 10,000 people have died since pro-democracy protests began in March 2011. In April, the Syrian government reported that 6,143 Syrian citizens had been killed by "terrorist groups".
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