By Khaled Yacoub Oweis
AMMAN (Reuters) – Syria's government passed a draft law on Tuesday to lift 48 years of emergency rule, a concession to unprecedented demands for greater freedom in the tightly-controlled Arab country.

But protests continued after the announcement, with demonstrators taking to the streets in the city of Banias and opposition leaders said they would not stop until their other demands, including the release of political prisoners, freedom of speech, and a multi-party system, were also met.
State news agency SANA said the cabinet ratified draft legislation, which must still be signed by President Bashar al-Assad, "to end the state of emergency in Syria."

Inspired by uprisings sweeping the Arab world, thousands of Syrians have demonstrated across the country demanding reforms, presenting Assad with the most serious and sustained challenge to his 11-year rule. Rights groups say more than 200 people have been killed in the unrest.

The cabinet, which has little power and rubber-stamps Assad's orders, also passed a law to abolish a special security court which human rights lawyers says violates the rule of law and the right to fair trial.
It also passed legislation to "regulate the right of peaceful protest." Permission from the Interior Ministry will be needed to demonstrate in Syria, the news agency said.

One activist dismissed the cabinet decision, saying Assad himself could have lifted emergency law immediately. "The government doesn't need to issue anything ... It's in the hands of the president to lift it," Ammar Qurabi said.

"This (announcement) is all just talk. The protests won't stop until all the demands are met or the regime is gone," leading opposition figure Haitham Maleh, an 80-year-old former judge, told Reuters.
Britain described the cabinet decision as a "step forward" but said Assad had "still has much more to do to meet the legitimate aspirations of the people of this country."

"We repeat the call for deaths to be avoided, for people to have the right to peaceful protest, for deaths that have already occurred to be fully investigated," Foreign Secretary William Hague told Sky News.
The cabinet decision came hours after activists said Syrian forces opened fire to disperse protesters in Homs, where 17 people were killed on Sunday night.

Rights activists said at least three more protesters were shot dead in the latest shooting early on Tuesday. SANA reported that four people, two policemen and two gunmen, were killed in clashes in the city.
The government says Syria is the target of a conspiracy and authorities blame the violence on armed gangs and infiltrators supplied with weapons from Lebanon and Iraq, a charge opposition groups say is unfounded.

CONCESSIONS AND CRACKDOWN

The protests, the most serious since an armed revolt by Islamists in 1982, comprise all shades of society including ordinary Syrians, secularists, leftists, tribal figures, Islamists and students.
Assad, who has ruled for 11 years since assuming power on the death of his father Hafez al-Assad, has responded with a combination of limited concessions and fierce crackdown.

In a sign that authorities would offer no ground to protesters, the Interior Ministry on Monday night described the unrest as an insurrection by "armed groups belonging to Salafist organisations" trying to terrorize the population.
Salafism is a strict form of Sunni Islam which many Arab governments equate with militant groups like al Qaeda. Assad and most of his inner circle are from Syria's minority Alawite community, adherents to an offshoot of Shi'ite Islam.

"Not Salafist, not Muslim Brotherhood. We are freedom seekers," hundreds of people chanted in Tuesday's demonstration in the coastal city of Banias, in response to the Interior Ministry statement.

Dozens of medical students also demonstrated at Damascus University's college of medicine earlier on Tuesday chanting "Stop the massacres. Syria is free. Syria is dignity," two rights campaigners in contact with the students said. They said security forces beat the students to break up the protest.

In Deraa, where the protests first broke out and which has seen most bloodshed, residents said on Tuesday that security forces who stayed off the streets in recent days were being reinforced, possibly ahead of a move to reassert full control over the restive Sunni Muslim town.

(Additional reporting by Yara Bayoumy and Mariam Karouny in Beirut, Suleiman al-Khalidi in Amman and Adrian Croft in London; Writing by Dominic Evans; Editing by Jon Hemming)