An AFP correspondent on the edge of rebel-held parts of Daraa city, the divided provincial capital, said the bombing was the heaviest since the launch of the Russian-backed offensive on June 19.
With its recapture, the government in Damascus is hoping to reopen a crucial economic lifeline with neighbouring Jordan.
As the birthplace of the Syrian war that erupted in 2011, Daraa is both symbolically and militarily significant for the Syrian army because the rebels have been using the Jordanian border to bring in arms and fighters throughout the Syrian war.
After four days of reduced bombardment, the intense air strikes had resumed on Wednesday following the collapse of talks between insurgent groups and Russian officers. The Syrian flag flew in the distance, along with what appeared to be a Russian flag.
More than 60,000 Syrians are said to have left Deraa for Jordan.
Assad's Iran-backed allies are also fighting in the campaign, defying Israeli demands they keep out of the border area.
Meanwhile, in the western suburbs of Deraa province, clashes between the Syrian army and rebels opposed to the truce deal intensified on Sunday, according to the source inside Syria.
Most of the hospitals had shut down amid the destruction in insurgent territory, which now barely had access to water or electricity, he said.
The deal also provides for government forces to take over "all observation posts along the Syrian-Jordanian border", it said, hours after the regime regained control of the vital Nassib border crossing with Jordan.
Russian Federation will not propose any settlement in the south that does not guarantee Israel's security, and with Iranian militias fighting alongside regime forces in the south it is impossible for Israel to waiver on keeping Iranian troops and pro-Iranian forces at least 50 km away from its border except if the Iranian presence does not vitiate national security goals for Tel Aviv.
Kurdish sources said Islamic State militants were behind the blast. They rampaged through administrative buildings, ripping down the Syrian state flag and stomping on pictures of Syrian President Bashar Assad.
It would also potentially allow the Syrian army to drive further southwards through the area immediately east of Deraa city, where rebel territory narrows to a thin corridor along the Jordanian border.
Tens of thousands of Syrians have fled the fighting in the region toward Jordan's border. The Norwegian Refugee Council has called this the largest displacement of Syria's seven-year war.
"Along with explosive residues, various chlorinated organic chemicals were found in samples from two sites", it said, indicating that chlorine may have been used as a weapon.
Israel has mostly stayed out of Syria's civil war, which is raging near its northern frontier.