AMMAN (Reuters) - At least 11 people were killed and dozens wounded on Sunday in intensified Syrian army shelling on Sunni Muslim districts of Homs, the city at the epicenter of the revolt, a day after U.N. observers suspended their work, opposition activists said.

"Around 85 percent of Homs is now under shelling or bombardment with mortar rounds and heavy machine guns," Abu Imad, an opposition campaigner, told Reuters by phone.

"Dozens of wounded are without treatment because all the hospitals have fallen under the control of shabbiha. The dead are the lucky ones," he said, referring to the militia, known as shabbiha (ghosts), loyal to President Bashar al-Assad.

Opposition sources said the shelling was heaviest on the main residential neighborhoods of Old Homs, al-Khalidiya, Jourat al-Shayyah, Qarabis and al-Bayyada, where Free Syrian army rebels are holed up along with the civilians remaining in Homs after hundreds of thousands fled over the last year.

"We can no longer talk about any real fighting in Homs because the army has cut districts from each other and is systematically gutting neighborhood by neighborhood with artillery," activist Mohammad al-Homsi said.

"Since the observers stopped working yesterday we have seen a clear escalation."

Chief monitor General Robert Mood said on Saturday increased violence has forced United Nations observers to suspend operations, the clearest sign yet that a peace plan brokered by international mediator Kofi Annan has collapsed.

(Reporting by Khaled Yacoub Oweis, Amman newsroom; Editing by Sophie Hares)