Ten guards were taken hostage after the violence broke out on Monday, following an attempt to transfer detainees to another prison near Damascus where numerous executions of inmates have been reported.
Activists say, most of the prisoners at the Hama jail are political detainees linked to the opposition.
Inmates "continued their mutiny today after the assault failed," said the Syrian Observatory for Human Rights, a British-based monitor.
"Tensions remained high," Observatory chief Rami Abdel Rahman said, "and security forces remained inside the prison but outside the cells".
The raid led to injuries among several inmates and "cases of fainting and choking" from the tear gas, the monitor reported.
Video footage posted on social networks showed a corridor filled with flames and smoke as a voice is heard giving the date as May 6 and the location as the central prison in Hama.
The sound of bursting tear gas grenades can be heard as inmates chant "Allahu Akbar!" (God is greatest) while others are heard coughing. It was not possible to verify the authenticity of the footage.
Water and power supplies remained cut off inside the jail today, according to the Observatory, which said the authorities had released 46 prisoners since the protest began.
Syria's main opposition group involved in peace talks yesterday called on international organisations "to intervene to prevent an imminent massacre" of prisoners.
The High Negotiations Committee urged the international community to "shoulder its responsibilities" and stop the regime from carrying out "reprisals against the detainees".
France warned of the risk of "deadly reprisals by the regime" and urged Damascus's allies to exert pressure "to avoid another massacre in Syria".
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