
"These remarks amount to further proof of the flagrant interference of the US in the internal affairs of Syria," Syria's state news agency Sana said.
After a crowd attacked the US embassy in Damascus on Monday, Mrs Clinton said Mr Assad was "not indispensable".
France also blamed the regime after its embassy was similarly targeted.
The embassy attacks came after the US and French envoys visited the northern city of Hama - a focus of anti-government unrest - last week, to show solidarity with residents facing a security crackdown. Syria said they had sought to incite the protests.
Human rights groups say at least 1,400 civilians and 350 security force personnel have been killed since anti-government demonstrations across Syria began in mid-March.
The Syrian government denies targeting civilians, saying it is tackling armed groups.
Embassy attacksPro-government demonstrators have held protests outside the US and French embassies in the Syrian capital for the past two days.
Hillary Clinton: "We have absolutely nothing invested in President Assad remaining in power"On Monday, three staff members at the French embassy were injured after protesters used a battering ram to try to enter the building. The protesters broke windows and replaced the French tricolore with the Syrian national flag.
The residence of the US ambassador, Robert Ford, was also briefly attacked.
In Washington, Mrs Clinton demanded that the Syrians "meet their international responsibilities immediately to protect all diplomats and the property of all countries".
In the strongest criticism from Washington to date, Mrs Clinton added: "President Assad is not indispensable and we have absolutely nothing invested in him remaining in power... Our goal is to see that the will of the Syrian people for a democratic transformation occurs."
Syrian officials denounced the remarks in a statement on Tuesday.
"The political leadership [of Syria] does not draw its legitimacy from the United States, but solely from the will of the Syrian people," it said.
Syria expects the US and its envoys "to refrain from any actions that are liable to provoke the sentiments of Syrians and their attachment to their national independence".
Dialogue endsThe diplomatic spat coincided with the close of a government-organised dialogue conference in Damascus that many opposition leaders have boycotted.
In the final statement from the two-day meeting, participants said that dialogue was the only way out of the current crisis.
It called for the immediate release of political prisoners and all those arrested during the past five months of unrest, and for a democratic and pluralistic Syria.
However, the statement rejected all kinds of foreign interference.
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