Egyptian president Mohamed Morsi said he had cut all diplomatic ties with Damascus on Saturday and called for a no-fly zone over Syria, pitching the most populous Arab state firmly against Bashar al-Assad.

Addressing a rally called by Sunni Muslim clerics in Cairo, Morsi said: "We decided today to entirely break off relations with Syria and with the current Syrian regime."

He also warned Assad's allies in the Iranian-backed Lebanese Shia militia Hezbollah to pull back from fighting in Syria.

"We stand against Hezbollah in its aggression against the Syrian people," Morsi said.

"Hezbollah must leave Syria – these are serious words. There is no space or place for Hezbollah in Syria."

Morsi, who faces growing discontent at home over the economy and over fears that he will pursue an Islamist social agenda, said he was organising an urgent summit of Arab and other Islamic states to discuss the situation in Syria, where the US has in recent days decided to take steps to arm the rebels.

Morsi, who spoke at a packed 20,000-capacity stadium and waved Syrian and Egyptian flags after his entrance, also urged world powers to enforce a no-fly zone over Syria.

The crowd of his supporters chanted: "From the free revolutionaries of Egypt: we will stamp on you, Bashar!"

Western diplomats said on Friday that Washington was considering a limited no-fly zone over parts of Syria.

But the White House noted later that it would be far harder and costlier to set one up there than it was in Libya, and said the US had no national interest in pursuing that option.

Russia, an ally of Assad and a fierce opponent of outside military intervention in Syria, said any attempt to impose a no-fly zone using F-16 fighter jets and Patriot missiles based in Jordan would be illegal.

Morsi said Syria was the target of "a campaign of extermination and planned ethnic cleansing fed by regional and international states", partly in reference to Iran, though he did not name the country.

Morsi said: "The Egyptian people supports the struggle of the Syrian people, materially and morally, and Egypt, its nation, leadership … and army, will not abandon the Syrian people until it achieves its rights and dignity."

Egypt has not taken an active role in arming the Syrian rebels but an aide to Morsi said this week that Cairo would not stand in the way of Egyptians who wanted to fight in Syria.