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Hassoun Abu Faisal, an activist with the Aleppo Media Center, said the barrel bombs destroyed vehicles lining a main road, crushed a two-story building and left a crater where part of the market had been.
"The medics say they are removing people in parts; they aren't sure how many there are," he said.
Human rights groups warn that even if Syrian forces are targeting rebels with the bombs, they often explode in residential areas and kill civilians.
Syrian officials have not commented on the air raids in Aleppo.
In central Syria, a suicide bomber blew himself up near a primary school in the predominantly Shia town of Umm al-Amed in Homs province, killing at least 12 people, half of them children, the Observatory said Sunday. Syrian state media said eight people were killed and 34 wounded, mostly children. It was not immediately possible to reconcile the conflicting tolls.
The bombing underscores the increasingly sectarian lines being drawn in Syria's civil war.
Syria's rebels are mainly Sunni, with hard-line brigades emerging as the most powerful fighting groups. Shia and other Syrian minority groups have either stayed neutral or sided with Assad, an Alawite, fearing for their future should the rebels prevail. Groups on both sides have targeted civilians.
Also Sunday, Syrian military aircraft bombed Bab al-Hawa, a border crossing to Turkey, according to a private Turkish news agency, Dogan, and the Aleppo Media Center and the Local Coordinating Committees, two activist networks.
Dogan reported that bombs hit the Syrian side of the crossing, killing or wounding several people, and that several ambulances from the Turkish town of Reyhanli were heading to the border gate to carry the wounded to hospitals. It was not immediately clear why the area was targeted.
Syria's civil war, now into its third year, has killed more than 120,000 people, according to activists. Millions have fled their homes because of the fighting.
Al Jazeera and wire services