* Syrian rebels shell Kurdish area of Aleppo
* Rebels also seize three villages south of city
* Scores of govt. fighters killed in battle

At least seven people died in rebel shelling of a neighbourhood of the Syrian city of Aleppo held by the Kurdish YPG militia at dawn on Saturday, a monitoring group said, as rebels took territory to the south.
More than 40 people were also wounded in the attack on the Sheikh Maqsoud area, the Britain-based Syrian Observatory for Human Rights said, a district next to the only way in and out of rebel-held parts of the northern city, the Castello road.
An escalation in air and artillery strikes in recent weeks around the road has made it virtually impassable, putting hundreds of thousands of people in Aleppo under effective siege.
Hundreds of people have been killed in Aleppo since peace talks broke off in April, as Syria's President Bashar al-Assad seeks to regain control of what was Syria's largest pre-war city, now split between rebel and government sectors.
Rebels have said in the past their attacks on Sheikh Maqsoud were in response to YPG attempts to cut the Castello road.
The YPG controls nearly all of Syria's northern frontier with Turkey and has been a close ally of the United States in the campaign against Islamic State in Syria. Many rebels in western Syria do not trust the YPG because they say it cooperates with Damascus rather than fighting it, an accusation the YPG has denied.

Heavy bombardment

Sheikh Maqsoud has been under intense bombardment since mid-February which has killed more than 132 civilians and injured around 900 more, the Observatory said.
A 48-hour ceasefire in Aleppo announced by Russia on Thursday has had little impact on fighting and air strikes and shelling have continued in and around the city since then.
Three people, two of them children, died and more than nine people were injured by barrel bombs dropped from helicopters in the city, the Observatory said on Saturday.
The White Helmets, a group of civil defence emergency workers operating in rebel-held areas, said on Twitter one of their buildings in Haritan, in the north Aleppo countryside, was hit by an air strike on Saturday. There were no injuries.
The Observatory also said on Saturday that rebels had captured three villages south of Aleppo from government control - Zeitan, Khalsa and Barna - causing significant losses among government forces and their allies.
The villages are near a main highway within rebel territory linking Aleppo with the capital Damascus to the south. They lie in an area captured by government forces at the end of last year in a large offensive assisted by Iranian-backed militias and Russian air power.
But the Syrian Observatory said there has been a lack of Russian air support during this week's battle for these villages.
At least 86 members of Syrian government forces and its allies - who include members of the Lebanese group Hezbollah and other Iranian-backed militias - were killed in fighting in the south Aleppo area in the past four days, the Observatory said.
The numbers could not be independently confirmed.
The rebels are fighting alongside the al Qaeda-affiliated Nusra Front which, like Islamic State, was excluded from a February ceasefire and from the Geneva peace talks.