Many were trapped under the rubble of destroyed houses and piles of concrete, and the death toll could still rise further if more bodies are uncovered.
The apparent ground-to-ground missile attack struck a quiet area that has been held by anti-regime fighters for many months, a reminder of how difficult it is for the opposition to defend territory in the face of the regime's far superior weaponry.
In the capital Damascus, state-run news agency SANA said two mortars exploded near one of President Bashar Assad's palaces. It dealt a symbolic blow to the embattled leader, who has tried to maintain an image as the head of a functioning state even as rebels edge closer to the heart of his seat of power.
No casualties were reported and it was unclear whether Assad was in the palace. He has two others in the city.
The attack was the first confirmed strike close to a presidential palace and another sign that the civil war is seeping into areas of the capital once considered safe.
"This is a clear message to the regime that nowhere is safe from now on," said Khaled al-Shami, an activist in Damascus reached via Skype. "The fact that they had to announce it means they can no longer hide what is happening in Damascus."
The news service, SANA, said "terrorists" fired the rounds that struck near the southern wall of the Tishreen palace in the capital's northwestern Muhajireen district. The government refers to anti-government fighters as terrorists.
The capital has largely been spared the violence that has left other cities in ruins. For weeks, however, rebels who have established footholds in the suburbs have been pushing closer to the heart of Damascus from the eastern and southern outskirts, clashing with government forces.