Isis militants just three miles away from Syrian President Assad’s seat of power in Damascus

Syrian government aircraft have reportedly been dropping barrel bombs on the camp since Sunday

Palestinian refugees shown queuing for food supplies in the Yarmouk refugee camp last year (AP)

Isis is now just five kilometres away from the Syrian President's Presidential Palace after militants invaded a sprawling Palestinian refugee camp in Damascus.

The extremist group and members of the al-Qaeda affiliate Jabhat al-Nusra are believed to have taken control of up to 90 per cent of the Yarmouk camp, where over 18,000 mostly Palestinian men, women and children remain trapped.

Both groups have fought fiercely against each other in the past but appear to be working together during the Yarmouk assault. Nusra said in a statement it is taking a neutral stance, according to Reuters.

The camp is now also reportedly being shelled by forces loyal to President Bashar al-Assad.

The Syrian Observatory for Human Rights said five barrel bombs had been dropped on the camp on Monday morning, bringing the total number over the past three days to 25.

The London-based Observatory quoted local sources as saying one civilian man had been killed and others wounded by the alleged attacks. It had no information on how many people had been injured since Sunday.

Rami Abdurrahman, the founder and director, told The Independent about 2,000 refugees are estimated to have escaped the camp since it was overrun by militants.

Reports emerged yesterday of Isis militants beheading captives after taking over a large proportion of the camp. Mr Abdurrahman said two men were beheaded after the clashes broke out on Wednesday and five others were shot dead by militants.

He said the beheaded men appeared to have been aged between 25 and 35, but he did not know the ages of the other men. These reports could not be independently confirmed.

Palestinian families arrived at a makeshift center in Damascus, Syria, 5 April 2015 (EPA)

Chris Gunness, a spokesman for the UN agency that supports Palestinian refugees known as UNRWA, described the situation inside as beyond “inhumane”. The UN Security Council convened an emergency meeting to assess the rapidly deteriorating conditions within the camp and appealed for the safe evacuation of refugees.

Pierre Krahenbuhl, the head of the UN agency for Palestinian refugees, called the situation "completely catastrophic”.

Yarmouk has been under a government siege for nearly two years, leading to civilians starving as aid workers struggle to distribute food assistance inside the camp. A report by The Independent found women were being shot at by snipers as they tried to gather plants to feed their starving children.

At its peak, the camp was home to 160,000 refugees who fled the area after fighting broke out between rebels and pro-Assad fighters. Only the most vulnerable remain trapped in the camp.