The fighting in Nabak pits Assad's army and allied militia against rebel factions.
The Syrian Observatory for Human Rights, a British-based pro-opposition monitoring group, said five children were shot dead when pro-Assad forces entered Nabak's industrial area.
Activists posted images on social media of the bloodied corpses of five children and said up to seven had been killed.
"What we know is that they (the children) were killed by shooting," Rami Abdulrahman, the Observatory's director, said.
Reuters could not independently verify the reports.
Nabak lies 80 km (50 miles) north of Damascus on Syria's north-south highway linking the capital to the central city of Homs and the coastal heartland of Assad's sect.
Fighting in the area intensified last month when the government launched an offensive to secure towns along the road.
The Observatory said pro-government forces shelled the eastern areas of Nabak and raided homes in the western areas as clashes continued on Sunday.
The state news agency SANA made no mention of casualties, but said the army was carrying out operations in the area and had eliminated "armed terrorist groups" around Nabak.
More than 100,000 people have been killed in Syria's 2-1/2-year-old conflict and efforts by divided world powers to end the violence have made little progress.