A UN Force confirmed the capture of the area by the rebels.
Rebels seized a UN-manned border crossing linking Israel and Syria on Thursday, activists said, following heavy clashes between the opposition and President Bashar al-Assad’s forces.
The crossing, in a UN-patrolled demilitarised zone on the Golan Heights, is the only passage between the two enemy countries and its capture seemed likely to heighten Israeli security concerns stoked by Syria’s civil war.
“The rebels have seized the crossing near the old city of Quneitra in the occupied Golan Heights,” said Rami Abdelrahman, head of the Britain-based Syrian Observatory for Human Rights.
“There are heavy explosions and fierce clashes ongoing in the area,” he added.
Israel is worried that the Golan, which it captured from Syria in 1967, will become a springboard for attacks on Israelis by jihadi fighters, who are battling Assad.
Alex Shalom, an Israeli farmer from the Golan Heights, said he saw heavy smoke rising from the crossing, and Israeli military ambulances evacuating people from the site.
An Israeli military spokeswoman said the area leading to Quneitra had been closed off and that two Syrians who were wounded in the fighting have been taken into Israel for treatment.
She could not say whether they were rebels or Syrian army soldiers
An Austrian Defence Ministry spokesman confirmed rebels have taken the border crossing, which is operated by the United Nations Disengagement Observer Force (UNDOF).
Austrians account for some 380 of the 1,000-strong mission.
The spokesman said the peacekeepers have withdrawn to their bunkers and were not hurt in the fighting.
Austrian Defence Minister Gerald Klug has cancelled all his appointments, a second spokesman said.
Vienna has warned it could withdraw its peacekeepers from the Golan Heights if fighting in the area escalates.
UNDOF Officials could not be reached for comment.
The Syrian Observatory for Human Rights said that fighting was raging in several areas in the Golan Heights.
An Israeli military spokeswoman said that two shells had landed inside the Israeli-held territory, causing no casualties or damage.