The Syrian cabinet decision came hours after activists said Syrian forces opened fire to disperse protesters in Homs, where 17 people were killed on Sunday night.
Rights activists said at least three more protesters were killed in the latest shooting early on Tuesday. SANA reported that four people, two policemen and two gunmen, were killed in clashes in the city.
The government says Syria is the target of a conspiracy and authorities blame the violence on armed gangs and infiltrators supplied with weapons from Lebanon and Iraq, an accusation that opposition groups say is unfounded.
CONCESSIONS AND CRACKDOWN
The protests, the most serious since an armed revolt by Islamists in 1982, comprise all shades of society including ordinary Syrians, secularists, leftists, tribal figures, Islamists and students.
Assad, who has ruled for 11 years since assuming power on the death of his father Hafez al-Assad, has responded with a combination of limited concessions and fierce crackdown.
In a sign that authorities would offer no ground to protesters, the Interior Ministry on Monday night described the unrest as an insurrection by "armed groups belonging to Salafist organisations" trying to terrorise the population.
Salafism is a strict form of Sunni Islam that many Arab governments equate with militant groups like al Qaeda. Assad and most of his inner circle are from Syria's minority Alawite community, who adhere to an offshoot of Shi'ite Islam.
"Not Salafist, not Muslim Brotherhood. We are freedom seekers!" hundreds of people chanted in Tuesday's demonstration in Banias, in response to the Interior Ministry statement.
Dozens of medical students also demonstrated at Damascus University's college of medicine earlier on Tuesday chanting "Stop the massacres. Syria is free. Syria is dignity," two rights campaigners in contact with the students said. They said security forces beat the students to break up the protest.
In Deraa, where the protests first broke out and which has seen most bloodshed, residents said on Tuesday that security forces who stayed off the streets in recent days were being reinforced, possibly preparing for a move to reassert full control over the restive Sunni Muslim town.