The Syrian Observatory for Human Rights said troops now controlled most of Khaldiyeh after a month-long assault and were battling insurgents on its outskirts.
The complete fall of Homs, dubbed by rebels "the capital of the revolution" against President Bashar al-Assad's regime, would be a major coup for the government as the city straddles a key route linking Damascus to the Mediterranean coast.
State television said the army now controlled most of the Khaldiyeh district and broadcast footage of the destruction, including rubble-strewn streets and bodies it reported were of fighters.
Some seven neighbourhoods in the Old City also remain in rebel hands, but troops appear determined to dislodge them as they did in the Homs province town of Qusayr, which they seized in June with help from Lebanon's Hezbollah militiamen.
Today's afternoon, regime forces also shelled rebel strongholds in the Old City, the Britain-based Observatory said.
"The army and Hezbollah control a major part of Khaldiyeh after having gained ground (over the past 24 hours) and fighting is now concentrated on the northern and southern outskirts of the district," Observatory chief Rami Abdel Rahman told AFP.
Al-Mayadeen, a Beirut-based satellite television channel considered close to the Damascus government, broadcast footage of Khaldiyeh showing massive destruction.
It also showed the interior of the famed Khaled bin Walid mosque which troops seized yesterday.
The ancient place of worship noted for its Ottoman and Mameluk architectural style is where Khaled bin Walid, a prominent Arab warrior and companion of the Prophet Mohammed, is said to be buried.
The mosque was a focal point of the uprising now in its third year, and had been the launchpad for several anti-government demonstrations.
Hezbollah, the strongest fighting force in Lebanon and whose military wing has been blacklisted by the European Union as a terrorist group, also helped the army retake Qusayr. That town is likewise strategic, standing on the border with Lebanon and linking Damascus to the coastal stronghold of Assad's minority Alawite community.
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