"We live in a real state of war from all angles," Assad said in a speech to his new Cabinet broadcast over state TV.
"When we are in a war, all policies and all sides and all sectors need to be directed at winning this war," he said.
Assad ordered the Cabinet to crush the uprising against his regime -- an uprising he has called a "foreign conspiracy" using Islamic "terrorists" to overthrow his secular leadership.
He made his comments to members of a new government elected as in a "reform" process that includes a revamped constitution.
Opposition activists call the reforms a sham and boycotted the elections.
Assad's comments came as Turkish Prime Minister Recep Tayyip Erdogan warned Turkey would militarily target any Syrian forces approaching their joint 565-mile border, following a disputed downing of a Turkish warplane.
Saying Syria had become a "clear and present danger," Erdogan told a Parliament meeting attended by Arab diplomats Turkey had revised its military rules of engagement toward its southeastern neighbor and former close ally.
"Every military element that approaches the Turkish border from Syria in a manner that constitutes a security risk or danger would be considered as a threat and would be treated as a military target," he said.
"From here, we warn the Syrian regime not to make any mistakes, not to test Turkey's decisiveness and wisdom," Erdogan said.
Turkey will not get "trapped into a war of provocation, but we won't be silent and do nothing either," he said, adding, "If there is anyone who could not understand this up until today, we would and will prove in the most clear and determined way that Turkey cannot be challenged."
Erdogan spoke after an emergency meeting of NATO ambassadors in Brussels condemned Syria's downing of a Turkish warplane Friday "unacceptable."
The NATO allies called the episode -- in which Syria shot down a Turkish two-seat, twin-engine F-4 Phantom -- "another example of the Syrian authorities' disregard for international norms, peace and security, and human life."
Turkey is a NATO member.
Syria claims the plane was flying low deep within Syrian airspace on a route previously used by Israeli warplanes. It says it didn't know the jet belonged to Turkey.
Turkey says the plane was on a training flight to test Turkey's radar along the Mediterranean coast. It says the plane was clearly marked as Turkish and was unmistakably attacked over international waters after it strayed briefly into Syrian space.
"Our plane was targeted not by mistake but deliberately, entirely in an act of hostility," Erdogan told lawmakers Tuesday.
"At a time, place and method defined by itself, Turkey will make use of its rights that derive from international law and firmly take necessary steps against this injustice," he said, without elaborating on what those steps might be.
In Washington, White House spokesman Jay Carney said, "We commend Turkey for its measured response thus far."
Carney said a "desperate" Assad was "slowly -- too slowly -- losing his grip over his country," citing high-ranking military defections and uncontrolled fighting increasingly raging close to Damascus, the capital.
Opposition and Syrian forces fought around elite Republican Guard posts in the Damascus suburbs Tuesday, as 116 people were killed across the country, the Syrian Observatory for Human Rights monitoring group said.
Several hundred more Syrian civilians crossed the border into Turkey, which is already sheltering more than 30,000 refugees.
"The Syrian people are our friends and brothers," Erdogan told Parliament. "We are going to support them until the dictator is gone."
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