Turkey scrambled two fighter jets after a Syrian military helicopter bombed the Syrian border town of Azmarin.
Tensions between Ankara and Damascus are worsening at a time when the 19-month-old conflict is intensifying with no sign of a diplomatic breakthrough.
Meanwhile, Syrian rebels battled to hold onto the main north-south highway as government forces fought insurgents on several fronts across the country.
There has been intense fighting between rebels and Syrian government forces this week in Azmarin and neighbouring towns, an area strongly opposed to President Bashar al-Assad's rule.
Fighting along Turkey's 900km border with Syria has repeatedly spilled over into Turkish territory in the past week.
The Turkish army has responded in kind to gunfire and mortar shells fired from Syria.
Shells fired onto Azmarin from surrounding hills sent thick plumes of smoke and dust rising into the air during fighting yesterday.
A voice amplified through loudspeakers, audible from the village of Hacipasa in Turkey's Hatay province, called on rebel fighters to surrender and warned of an air assault.
Turkish Chief of Staff General Necdet Ozel said this week his troops would respond "with greater force" if the shells continued to land on Turkish soil.
Last week, parliament authorised the deployment of troops beyond Turkey, heightening fears that Syria's civil war would drag in regional powers.
The Syrian Observatory for Human Rights said more thatn 260 people were killed yesterday, including civilians and combatants on both sides, as fighting raged in the capital and the north, west and east of the country.
It said 92 soldiers had been killed, one of the highest daily tolls on the government side since the uprising against President Assad broke out in March 2011.
The official SANA news agency also reported fighting nationwide and said dozens of rebels, which it called "mercenary terrorists", had been killed.