They were killed when regime forces unleashed an aerial attack using explosive-laden barrels over the eastern Aleppo districts of Sakhur, Ard al-Hamra, Ansari and Haydariyeh, said Observatory director Rami Abdel Rahman.
Fourteen children and an 18-year-old boy are among 25 people killed, he said updating an earlier toll, and warning that the toll could rise because many people were wounded, some in critical condition.
The Aleppo Media Centre (AMC), an activist network on the ground, reported several air attacks on rebel-held areas of the city.
The city is now divided into pro- and anti-regime areas, and according to the AMC, the regime uses its air force near daily to target rebel districts.
An AMC activist in the city, Mohammed al-Khatieb, said in a message posted on Facebook that the raids were "unprecedented."
"Everyone is looking up at the skies and watching the planes. But there's nothing to be done," he said.
Barrel bombs were dropped on some 10 neighbourhoods of the city, Khatieb later told AFP, adding: "Many people have been killed."
Earlier this week the government announced an amnesty for scores of prisoners held on criminal charges due for humanitarian reasons.
Fifteen prisoners have already been released, escorted out of the jail by volunteers, according to the Observatory while 341 other detainees are awaiting to be freed.
Meanwhile, in Adra northeast of Damascus, at least 32 civilians have been confirmed dead in Adra since Wednesday, when Islamist rebels launched an offensive aimed at capturing the key entrance into the capital, said the Observatory.
"Reports have also surfaced of dozens of people missing from Adra," said the Observatory, which relies on a network of doctors, activists and lawyers on the ground for its reports.
The army has vowed to "crush" Islamist rebels in the industrial town, which has seen fierce fighting for five days.
Most of the country's Alawites -- whose religion is an offshoot of Shiite Islam -- support Assad, and many members of other minority groups fear a Sunni Islamist victory in the Syrian conflict.
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