It quoted activists as saying that regime forces fired "rockets with poisonous gas heads" in the attack that killed "tens of people."
Rami Abdul-Rahman, the Observatory chief, said the activists in the area said "poisonous gas" was fired in rockets as well as from the air. He added that regime forces were on a wide offensive on the eastern and western rebel-held suburbs of Damascus.
Another group, the Local Coordination Committees, said hundreds of people were killed or injured in the shelling. Such different figures from activists groups are common in the immediate aftermaths of attacks in Syria, where the Government restricts foreign and domestic reporting. Abdul-Rahman said more than 40 people have been confirmed dead and the toll could go much higer.
The Syrian Government has long denied claims by the opposition on chemical weapons use, saying rebels fighting to overthrow President Bashar al-Assad's government have used such weapons.
Mohammed Saeed, an activist in the area, told AP via Skype that hundreds of dead and injured people were rushed to six makeshift hospitals in the eastern suburbs of Damascus.
- AP