Syrian President Bashar al-Assad has outlined a new peace initiative, including a national reconciliation conference and a new government and constitution, but demanded regional and Western countries stop funding and arming rebels first.The president was speaking on Sunday in a rare address to the nation, his first since June. He spoke to a packed hall at the Opera House in central Damascus, and the audience frequently broke out in cheers and applause.Assad ignored international demands for him to step down and said he is ready to hold a dialogue with those "who have not betrayed Syria”.The Syrian opposition, including rebels on the ground, were quick to reject Assad’s proposal.Louay Safi, a member of the Syrian National Coalition opposition bloc, dismissed the address to the nation as "empty rhetoric”."He did not offer to step down, which was a precondition to start any negotiation,” Safi said."He has shown that he is a dictator that we cannot negotiate with. I think he has no desire to relinquish power. He wants to crush the opposition and he hopes he can stay over for the next 40 years like his father did.”Opposition leaders have repeatedly said they will accept nothing less than the president’s departure, dismissing any kind of settlement that leaves Assad in the picture."There’s not a single opposition leader who can go public and say ‘we will negotiate and compromise with Assad in power’, a senior commander of the Free Syrian Army told Al Jazeera."He would be on the spot treated as a traitor. We’ve passed that stage. Now, we’re just looking forward to a new era without Bashar al-Assad.”‘State of war’Assad said his nation is in a "state of war”."We are fighting an external aggression that is more dangerous than any others, because they use us to kill each other,” the president said.He stressed the presence of religious extremists and jihadi elements among those fighting in Syria, calling them "terrorists” and "servants who know nothing but the language of slaughter”."We have terrorists who follow the ideology of al-Qaeda. We brothers fight against these people. Most of them are not Syrian... We will teach them a lesson,” Assad said.Wearing a suit and tie, Assad spoke before a collage of pictures of what appeared to be Syrians who have been killed since March 2011.The internet was cut in many parts of Damascus ahead of the address, apparently for security reasons.As in previous speeches, Assad denied that there was a popular uprising against his family’s decades-long rule."Is this a revolution and are these revolutionaries? By God I say they are a bunch of criminals,” he said.Agencies