The Arab League has called on Syrian President Bashar al-Assad to delegate power to his vice president, and for elections to be held under a "national unity government", Al Jazeera reported.
The bloc's members agreed on a political initiative for a unity government and early elections to end the crisis in Syria, the Qatari Prime Minister said after a meeting of the 22-member body in Cairo on Sunday.
Sheikh Hamad bin Jassim al-Thani said the League will ask the UN Security Council to support its plan for transition.
"After the establishment of the government of national unity, there has to be a referendum and preparation for new elections. The Arab League's Secretary-General is to send a new special envoy to Syria, and will call on the international community to support this national unity government to fulfill its functions," PM al-Thani said.
He also reiterated the Arab League's demands that the violence in Syria be brought to an end, that political detainees be released and that the Syrian military pull out of cities.
Earlier, Saudi Arabia has said it was pulling out its observers from the Arab League observer mission to Syria because Damascus had not kept its promises.
Riyadh "is withdrawing from the mission because the Syrian government has not respected any of the clauses" in the Arab plan aimed at ending the crisis there, said Prince Saud al-Faisal, the Saudi foreign minister.
The move came as foreign ministers of the pan-Arab body met to hear the recommendations of a League panel that the organisation extend its monitoring mission to Syria by a month.
The panel was briefed earlier on the first month of the monitoring mission by its chief, General Mohammed Ahmed Mustafa al-Dabi of Sudan. Dabi wants his mandate to be strengthened, not scrapped, a League official had said.
Meanwhile, a full session is due to convene to decide on the future of the operation after a ministerial meeting earlier on Sunday was chaired by the Qatari foreign minister and attended by his counterparts from Algeria, Egypt, Oman, Saudi Arabia and Sudan.
In a broader meeting, chaired by Nabil Elaraby, the Arab League's head, the foreign ministers were expected to extend the mandate of the one-month monitoring mission that expired two days earlier.
An observer mission official, speaking on condition of anonymity, said the monitors, entrusted with monitoring the Syrian government's implementation of a peace plan aimed at ending violence in the country, would increase from 165 to 300.
Another source close to Elaraby said the foreign ministers could decide to offer the additional support in the form of UN or military experts.
"Every indication is that [General Muhammad Ahmed Mustafa al-Dabi, the head of the monitoring mission] has recommended that this mission be extended for another month," reported Al Jazeera's Mike Hanna from Cairo.
"We understand that al-Dabi has said to the Syrian committee that the mission has not gained enough momentum yet to get a full judgment on it, he needs more time with the added monitors that he's received in recent weeks and the added geographical places in which the monitoring mission is now extended to see if this mission can in fact work."
The meeting comes amid reports of clashes between Syrian government troops and army defectors in Douma, a suburb of the capital, Damascus, on Saturday night and into Sunday.
"Apparently there were some clashes between the regime's army and the FSA [Free Syrian Army] but the FSA has gone back to its positions," Rafif Jouejati, a spokeswoman for the Local Co-ordination Committees (LCC) activist network, told Al Jazeera.
She said there had been an explosion in the area, apparently targeting a riot police vehicle.
"Activists are reporting heavy clashes between members of the Free Syrian Army and regular troops in Douma. It's a suburb of Damascus - one of the biggest suburbs [and] has been a protest hub for some time now, and it seems that the FSA is gaining strength in that region," reported Al Jazeera's Zeina Khodr from Beirut on Sunday afternoon.
"Last night there were conflicting that the Syrian security forces were forced to retreat because of resistance from the FSA. What is clear is that neither side is in control [of the area]."
Anti-Assad activist groups say that security forces have been firing on anti-government protesters in several locations around Damascus on Sunday, including Rankous and Douma, and in Karm al-Zaitoun in Homs.
Activists say that hundreds of people have been killed since the monitors arrived in Syria, with some reporting the deaths of as many as 740 civilians in the last month.
Critics say the Arab mission has only provided diplomatic cover for President Bashar al-Assad to pursue a crackdown that has already killed more than 5,000 people since anti-government protests erupted in March 2011, according to a UN count.
Monitors' head 'satisfied'
The mission's chief, General al-Dabi of Sudan, is satisfied with the observers' achievements so far, the mission's deputy chief of operations, Ali Jarush, said.
"Everything indicates the observer mission in Syria will be extended by a month," Jarush said.
"Dabi sees that in the last phase the necessary thrust [of the operation] was achieved after more monitors were deployed and fanned across 20 areas and after they were provided with equipment and logistics which they previously lacked."
Syria's main opposition bloc, the Syrian National Council (SNC), said, however that Dabi's report would not be credible.
Burhan Ghalioun, the head of the SNC, said he told Elaraby in Cairo, the Arab League's headquarters, that the conditions under which the observers were forced to work "do not allow it to present an objective report, reflecting the actual situation in Syria".
The League's monitors were escorted around Syria by government troops.
The SNC formally asked the Arab League on Saturday to refer the Syrian crisis to the UN Security Council.
"We think that when the Arab League refers the case to the United Nations and to the Security Council the situation will change," Basma ElKadamny, an SNC spokesperson, said in Cairo.
Al Jazeera's Mike Hanna, reporting from Cairo, said: "the opposition is arguing that the monitoring mission has not succeeded in persuading the Syrian government to follow along with the peace plans which involved a number of steps: the removal of military from urban centres, the release of all detainees and end to the crackdown on the opposition."