At least 23 protesters, including a 12-year-old boy, have been shot dead by Israeli forces near the border fence on Golan Heights, Syrian state television has reported.
Another 325 people were injured, according to the TV station.
But Israeli officials dismissed the fatality claims, calling the death toll of 23 "exaggerated".
Israel accused Syrian President Bashar al-Assad of encouraging the unrest to divert attention from his crackdown on domestic protests, while Damascus accused Israel of "flagrant aggression."
Israel's military said it counted 10 protesters dead - none of whom was killed by Israeli fire.
"We are aware that around 10 of the casualties that the Syrians reported yesterday were killed by the fact that they used Molotov cocktails in the Quneitra area that hit some Syrian landmines," Lieutenant Colonel Avital Leibovitz said.
"I think there is solid ground to believe that (the Syrian figures) are exaggerated," she said.
"A big number of them died as a result of their own deeds."
The violence occurred as a large crowd of pro-Palestinian demonstrators approached the border to mark the anniversary of the 1967 Six-Day War.
An Israeli military spokesman said the soldiers fired at demonstrators after warning them to back away.
"Despite numerous warnings, both verbal and later warning shots in the air, dozens of Syrians continue to approach the border and IDF (Israel Defence Force) forces were left with no choice but to open fire towards the feet of protesters in efforts to deter further actions," said a spokesman.
On the Israeli side, locals - many of whom are Syrian citizens - from the Golan Heights town of Majdal Shams shouted at the soldiers, calling on them to stop firing.
Meanwhile, the troops used loudspeakers to warn demonstrators in Arabic that "anyone who comes close to the fence will be responsible for their own blood."
Hundreds of protesters rushed towards the ceasefire line, attempting to cut through a line of barbed wire and head into the Golan Heights in a repeat of demonstrations last month, which saw thousands mass along Israel's north.
"Our aim is to plant the Syrian flag on the occupied land," protester Mohammed Shaiber told Syrian TV.
On May 15, protesters massed on Israel's borders with Syria, Lebanon and Gaza, trying to force their way across on the anniversary of Israel's creation.
The Israeli military accused Syria of instigating the disturbances to deflect attention from its bloody crackdown on a popular uprising at home.
"This is an attempt to divert international attention from the bloodbath going on in Syria," said Lieutenant Colonel Avital Leibovich, an Israeli military spokeswoman.
"In the end, we are guarding our border," she said. "I wish they had obeyed our verbal warnings, but they chose instead to clash with the soldiers."
Prime Minister Benjamin Netanyahu told his Cabinet: "Unfortunately, extremist forces around us are trying today to breach our borders and threaten our communities and our citizens. We will not let them do that."
He said security forces had been ordered to show "maximum restraint".