A UN-brokered deal could see thousands of Syrian rebels and their families leave areas in and around the Yarmouk Palestinian refugee camp in Damascus.
The deal, which is still at a delicate stage, involves agreement between rebel fighters and the government.
It could see a number of militants from Islamic State (IS) given safe passage to their stronghold of Raqqa.
The aim is to make Yarmouk safe again so that the 18,000 people believed to be trapped there can receive aid.
In April, IS militants infiltrated the camp and briefly seized large parts of it.
Yarmouk is divided into areas controlled by IS, the rival al-Qaeda-linked al-Nusra Front and pro- and anti-government Palestinian militants.
Government forces maintain checkpoints around the area preventing civilians from leaving.
The proposed deal could see fighters begin to withdraw from Yarmouk, and the neighbouring districts of Hajar al-Aswad and al-Qadam, as soon as Friday.
It is not clear exactly which groups are involved, but the Syrian Observatory for Human Rights reported that wounded IS militants and members of their families would be among those leaving.
'Deepest circle of Hell' - Sebastian Usher, Middle East analyst, BBC News
Earlier this year, UN Secretary General Ban Ki-moon described Yarmouk as the "deepest circle of Hell". So the deal, if it goes through, should benefit all those involved.
Once Yarmouk is made safe the UN will be able to get aid to the refugees freely; the Syrian government will have a latent threat removed from its doorstep; the wounded and exhausted rebels will be able to fight another day; and the IS fighters will have safe passage to Raqqa.
Similar deals have been made elsewhere in Syria when it has been in all the combatants' interest. It is a model the UN has hoped to build on. As peace efforts resume in the New Year, it could provide one small bright spot in the surrounding darkness.
The UK-based monitoring group, which uses a network of sources on the ground, said a number of buses had already arrived in al-Qadam to take them to IS-held territory elsewhere in Syria.
Earlier this month, pro-government media reported a deal between the government, IS and the rival jihadist group al-Nusra Front to allow members of both safe passage out of Yarmouk and Hajar al-Aswad to Raqqa and the northern province of Idlib under a UN guarantee.
The city of Raqqa is the de facto capital of the caliphate whose creation IS proclaimed last year, while Idlib is largely controlled by a rebel alliance that includes al-Nusra Front, al-Qaeda's affiliate in Syria.
Yarmouk was first built for Palestinians fleeing the 1948 Arab-Israeli war. Before the Syrian civil war began in 2011, it had more than 150,000 refugees living there.
Those trapped in the camp for the past two years, including 3,500 children, have no access to regular food supplies, clean water or healthcare.
In a separate development on Thursday, activists reported that at least 20 people had been killed in air strikes in an eastern Damascus suburb.
The Syrian Observatory said seven children were believed to among those who died when government warplanes bombed rebel-held Hammuriyeh.