In an interview with the Sunday Times, Assad criticized the U.S. and Britain for sending financial and other non-lethal aid to the opposition. He set harsh terms for talking to his opponents, dialing back earlier hints of flexibility about talks.
He told the British newspaper that he is ready for dialogue with armed rebels and militants, but only if they surrender their weapons. Recently, the Syrian government offered to participate in talks, but didn't address the question of laying down arms.
"We are ready to negotiate with anyone, including militants who surrender their arms. We are not going to deal with terrorists who are determined to carry weapons to terrorize people, to kill civilians, to attack public places or private enterprise and to destroy the country," Assad said in the interview, conducted in Damascus. "We fight terrorism."
The opposition, including fighters on the ground and the Syrian National Coalition umbrella group, has rejected talks with Damascus until Assad steps down, a demand he has repeatedly rejected.
Kerry met Thursday with Syrian opposition leaders in Italy, where he said the U.S. will for the first time provide the non-lethal aid directly to the fighters in addition to $60 million in assistance to the political opposition.
Assad said the "intelligence, communication and financial assistance being provided is very lethal."
He bitterly criticized British Prime Minister David Cameron's push for peace talks as "naive, confused, unrealistic" while London tries to end the European Union's arms embargo so that the rebels can be supplied with weapons.
"We do not expect an arsonist to be a firefighter," he said, dismissing any notion that Britain could help end the civil war. "How can we ask Britain to play a role while it is determined to militarize the problem?"
Britain's aim to send aid to moderate opposition groups was misguided, Assad said, adding that such groups do not exist in Syria. Arming the rebels would have grave consequences, he warned.
"We all know that we are now fighting al-Qaida, or Jabhat al-Nusra, an offshoot of al-Qaida, and other groups of people indoctrinated with extreme ideologies," he told the newspaper.
Jabhat al-Nusra fighters have been the best organized and most effective force on the opposition side, leading successful rebel assaults on military installation around the country. Al-Nusra has also claimed responsibility for car bombs and suicide attacks on government institutions in Damascus. The U.S. has designated the group a terrorist organization, saying its fighters have ties with al-Qaida.
British Foreign Secretary Foreign Secretary William Hague said Assad's comments were proof that the Syrian leader was out of touch with reality.
"I think this will go down as one of the most delusional interviews that any national leader has given in modern times," Hague said in an interview Sunday with the BBC.
Associated Press writers Jamal Halaby in Amman, Jordan, and Maamoun Youssef in Cairo and Qassim Abdul-Zahra in Baghdad contributed to this report.