Palestinian fighters have advanced in clashes with Islamic State (IS) militants in the Yarmouk refugee camp in Damascus, Palestinian officials say.
A spokesman for one faction told the BBC that the jihadists had been forced to retreat from some positions.
Residents earlier told the Reuters news agency IS had largely withdrawn to the neighbouring area of Hajar al-Aswad.
IS overran much of Yarmouk, where 18,000 people have been besieged by the Syrian army for two years, on 1 April.
The United Nations is extremely concerned about the safety of the Palestinians and Syrian civilians trapped inside, which it has described as “the deepest circle of hell”.
On Wednesday morning, several Yarmouk residents told Reuters that hundreds of IS militants had returned to their stronghold in Hajar al-Aswad, from where they launched their assault on the camp two weeks ago.
However, a spokesman for the Popular Front for Liberation of Palestine-General Command (PFLP-GC), which supports the Syrian government, denied the reports of a withdrawal.
Anwar Raja told the BBC that while Palestinian factions were advancing and had regained control of some areas inside the camp, fighting was continuing.
Sami Hamzawi, a Palestinian activist from Yarmouk who currently lives outside Syria, also told the Associated Press that Aknaf Beit al-Maqdis, the Palestinian faction that has led the defence of the camp, was advancing from areas it holds in the north.
The Palestine Liberation Organisation’s envoy to Damascus told Reuters that the withdrawal of IS would leave al-Nusra Front, al-Qaeda’s affiliate in Syria, as the biggest force in Yarmouk.
“They and Nusra are one. They are changing positions,” Anwar Abdul Hadi said.
Al-Nusra was not believed to have been involved in the recent fighting inside Yarmouk, but was accused by rivals of facilitating the IS assault on the camp.
Although the rival jihadist groups have fought bloody battles elsewhere in Syria since early 2014, they share a loathing for Aknaf Beit al-Maqdis, according to Reuters.
Last Thursday, UN Secretary General Ban Ki-moon expressed alarm at the plight of Yarmouk’s residents, among them some 3,500 children, who have suffered chronic food shortages and limited medical care because of the Syrian government siege to force rebels sheltering there to surrender.
“A refugee camp is beginning to resemble a death camp,” he told reporters.