The Cabinet also issued an order mandating citizens to obtain permits for demonstrations and a draft order to cancel the Supreme State Security Court, CNN said Syrian media reported.
The action came after security forces fired at thousands of protesters overnight in Homs and the Interior Ministry equated the protests with insurrection, witnesses said.
A human rights activist told CNN at least three protesters were killed and dozens were wounded in Homs.
Activists said a member of the security police used loudspeakers to demand the crowd to disperse, then forces opened fire, the BBC reported. Reports indicated government forces fired tear gas then live ammunition on protesters and the public square in Homs was cleared.
One protester told BBC gunfire was "hammering on us like rain."
The crowd had gathered to protest the crackdown by the security forces, whom activists say killed 14 demonstrators Sunday, The New York Times reported. The protest began at a funeral for the shooting victims.
Ahmad, 28, a university student at the Homs protest, told the Times demonstrators were calling for a three-day strike "to show our rejection of the cold-blooded killing of peaceful protesters. Homs is boiling and no one can tell you what will happen in the near future."
Human rights activists estimate about 200 Syrians have been killed in weeks of unrest. State-run media reported a three military officers, including a brigadier general, his two sons and a nephew, were killed Sunday by "armed criminal gangs," al-Jazeera reported.
Three rings of government-backed checkpoints surrounded Homs and a curfew was imposed, witnesses said
The town of Talbiseh also was sealed off by government forces Monday, al-Jazeera said.
Earlier, the Interior Ministry declared the protests, aimed at ousting President Bashar Assad, amounted to armed insurrection.
In a statement Monday, the ministry said, "The course of the previous events … have revealed they are an armed insurrection by armed groups belonging to Salafist organizations, especially in Homs and Baniyas. … [Their] terrorist activities will not be tolerated."
Salafism is a form of Sunni Islam that many Arab governments equate with militant groups such as al-Qaida, the BBC explained.
Radwan Ziadeh, a Syrian human rights activist and visiting scholar at George Washington University, told the Times he was worried by the ministry's statement.
"I'm very concerned about the statement," Ziadeh said. "This is a justification for what they intend to do in next few hours. This is the green light for armed confrontation."
Assad announced Saturday he would end nearly 50 years of emergency rule next week and the government has been releasing political prisoners, both key demands of protesters.
Other concessions Assad has made include appointing and swearing in a new Cabinet; establishing committees to investigate the recent killing of civilians in the protests and granting Syrian citizenship to thousands of the country's Kurdish minority.