The Egypt-style standoff in the central city of Homs followed funeral processions by more than 10,000 mourners for some of those killed in clashes yesterday that a rights group said left at least 12 people dead.
It also brought a high-stakes challenge to security forces over whether to risk more bloodshed and international backlash by trying to clear the square.
In the past month, Syrian security forces in uniforms and plainclothes have launched a deadly crackdown on demonstrations, killing at least 200 people, according to human rights groups.
Many Syrians also say pro-government thugs known as Shabiha have terrorised neighborhoods with tactics such as opening fire into the air.
In response, the government has blamed armed gangs seeking to stir up unrest for many of the killings.
Syria''s foreign minister, Walid al-Moallem, was quoted by the state-run news agency SANA as telling foreign ambassadors Monday that reforms are a "national need" but they cannot be forced through "violence, weapons, sabotage and road closures."
In a strong warning, al-Moallem said authorities are facing pressures to restore "security and order" and said it could take all "suitable measures" if demonstrations persist.
On Friday, security forces blocked attempts to hold a similar sit-in in the capital Damascus.
Earlier in the day, at least six coffins were carried by the massive funeral procession in Homs, about 100 miles (160 kilometers) north of Damascus, said two witnesses.
Security forces stayed away from the mourners in an apparent move to avoid confrontation, said the witnesses, who spoke on condition of anonymity for fear of government reprisals.