* Rebels make small advances as fierce battle rages near capital

* Eastern outskirts of capital blockaded for over 6 months

* Syria peace envoy meets with Syrian opposition, Iran officials (Adds Geneva talks, details on Eastern Ghouta fighting)

By Erika Solomon

BEIRUT, Nov 24 (Reuters) - Fierce fighting to the east of Damascus has killed more than 160 people in the past two days as Syrian rebels struggle to break a months-long blockade by forces loyal to President Bashar al-Assad, activists said on Sunday.

It began on Friday when rebel units attacked a string of military checkpoints encircling the opposition-held suburbs in an area known as Eastern Ghouta, which has been under siege for more than six months.

Local and international aid workers say Assad's forces appeared to be trying to starve out residents - indiscriminately affecting civilians as much as rebel fighters.

The blockade has cut off rebels' weapons supplies and helped turn the tide of fighting around the capital in Assad's favour.

The battle has also drawn in hundreds of foreign fighters on both sides, underlining how Syria's civil war has stirred Sunni-Shi'ite sectarian tensions across the region.

"It is a ferocious fight between the two sides because it's a struggle over our ultimate fate here," said Bara Abdelrahman, a media activist with the rebel Islam Army brigades in the area.

The conflict in Syria has killed more than 100,000 people, according to the United Nations, and is also destabilising Syria's neighbours.

Foreign powers are trying to bring the warring sides together for a peace conference in Switzerland before the end of the year, dubbed 'Geneva 2'. On Sunday, Syria's peace envoy Lakhdar Brahimi met with members of the opposition to discuss the talks, which many rebel groups have rejected without a clear guarantee that Assad will step down.

Assad's government says it welcomes talks but will not accept any preconditions.

Meanwhile, Assad's forces, emboldened by gains in central Syria in recent months, have been seizing back towns in the rebels' northern stronghold.

REBELS ADVANCE IN GHOUTA

The Syrian Observatory for Human Rights said rebels had advanced in Eastern Ghouta in recent fighting, seizing some small villages and the once government-held town of Deir Attiya.

Assad's forces responded with three air raids, it said.

The mainly Sunni Muslim rebels have drawn support from radical Sunni groups such as al Qaeda and other foreign militants. Shi'ite governments and militias have thrown their weight behind Assad, who is from Syria's minority Alawite sect, an offshoot of Shi'ism.