Millions of people have been without water for weeks after fighting damaged key infrastructure in the Wadi Barada region that is the main water source for Damascus.
The government says the jihadist Fateh al-Sham, formerly known as Al-Qaeda affiliate Al-Nusra Front, is present in Wadi Barada, and blames rebels there for cutting water to Damascus since December 22.
"The role of the Syrian Army is to liberate that area in order to prevent those terrorists from using that water in order to suffocate the capital," Assad told French media.
Assad said the ceasefire was being "breached on a daily basis" and mainly in Damascus "because the terrorists occupy the main source of water" in Wadi Barada.
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He said "more than five million civilians have been deprived of water for the last three weeks" as a result of the fighting. The United Nations says 5.5 million people in and around Damascus are without water.
Assad said that Fateh al-Sham is "occupying" the Wadi Barada region, 15 kilometres (10 miles) northwest of the capital.
Assad also insisted that the ceasefire brokered by Russia and Turkey does not include Fateh al-Sham or its formidable rival, the Islamic State group.
His comments aired by French media came as fighting raged on several fronts in the Wadi Barada region today, the Syrian Observatory for Human Rights said.
The Britain-based monitoring group said regime forces backed by fighters from Lebanon's Shiite militant movement Hamas battled rebels and Fateh al-Sham jihadists.
On Saturday maintenance teams attempted to reach the Wadi Barada region to begin working on restoring water supplies for Damascus but were forces back by sniper fire, state media said.