More than 20 percent of Syria's Palestinian refugees have fled the country and its five-year war, the head of the U.N. Palestinian refugee agency said on Thursday.

"Before the war, there were 560,000 Palestine refugees. We estimate that currently about 110,000 to 120,000 have left the country," UNRWA chief Pierre Krahenbuhl said on a visit to Damascus.

Turkey is preparing to "clean" the Syrian side of the border of Islamic State jihadists after a Turkish border town came under repeated deadly rocket attacks, President Recep Tayyip Erdogan said on Thursday.

"We are doing all the necessary preparations to clean the other side of the border because of the problems in Kilis," Erdogan said amid persistent speculation of a possible Turkish cross-border ground operation, without giving details on the preparations.

Britain, France, the United States and Ukraine on Tuesday blocked a Russian request to add two Syrian rebel groups to a U.N. terror blacklist and sideline them from the Syrian peace process, diplomats said.

Russia had requested that Jaish al-Islam (Army of Islam) and Ahrar al-Sham be added to the sanctions list for their ties to al-Qaida and the Islamic State group.

The Syrian army exchanged fire with rebels in battleground second city Aleppo even before the expiry at midnight on Wednesday of a Russian- and U.S.-brokered ceasefire.

Syria's central bank on Tuesday ordered exchange bureaus to buy millions of dollars from it, state media said, to boost a currency at its lowest value in the five-year war.

Jihadists are withholding the bodies of 12 Iranian Revolutionary Guards killed last week in Syria, an Iranian military official said Tuesday, quoted by ISNA news agency.

The U.S. government has suspended millions of dollars in funding to several organizations providing aid for Syria after discovering they were systematically overpaying Turkish companies for basic goods with the collusion of some of their staff.

The U.S. Agency for International Development's independent government auditor said it had "established grounds resulting in the suspension of 14 entities and individuals involved with aid programs from Turkey."

Syria's currency hit its lowest value since the start of the country's five-year conflict on Sunday, having depreciated more than 92 percent, an economist said.

Displaced families returned home and schools reopened in rebel-held districts of Syria's Aleppo on Saturday after a temporary truce was extended for 72 hours in the battleground northern city.

Residents trickled back into eastern areas of Aleppo, encouraged by a halt in the deadly violence that hit last month, an AFP reporter said.

Condemnation mounted Friday over deadly air strikes on a camp for displaced people in northern Syria as the regime and its Russian ally denied involvement and a fragile truce held in Aleppo city.

Women and children were reported to be among 28 civilians killed in Thursday's raids near the Turkish border, which also wounded 50.