Damascus missed a November 25 deadline to sign an agreement under which the Arab League planned to send observers to Syria, where the United Nations says 3,500 people have been killed since the start of the uprising in March.

Despite Syria's pledge this month to withdraw its army from urban areas and let in the monitors, the violence has continued, prompting reprisals from the Arab League, stinging rebukes from Turkey and French proposals for humanitarian intervention.

Arab ministers had warned that unless Syria agreed to let the monitors in, they could consider imposing sanctions including suspending flights to Syria, stopping dealings with the central bank, freezing Syrian government bank accounts and halting financial dealings.

They could also decide to stop commercial trade with the Syrian government "with the exception of strategic commodities so as not to impact the Syrian people," the ministers said.

The League's economic and social council, which can comprise officials or ministers, will meet on Saturday to prepare recommendations for a meeting of foreign ministers the next day.

Syria's economy is already reeling from months of unrest, aggravated by US and European sanctions on oil exports and several state businesses.