Syria has also become the world's largest refugee crisis, the United Nations says, with more than 5.6 million Syrians fleeing to Jordan, Lebanon, Iraq and Egypt.
U.N. High Commissioner for Refugees Filippo Grandi, who recently visited Syria, said around 70 percent of Syrian refugees live a "razor-edge" existence in poverty.
Despite funding by the EU, Norway and some Gulf countries, last year 65 percent of the $3.4 billion sought for people inside Syria came through. A demand for $5.6 billion for the region's refugee was 62 percent funded, the United Nations said.
Donors must contend with U.S. President Donald Trump's demand that allies carry more of the burden. His government last year failed to submit a pledge, although U.S. funding commitments eventually came in, EU diplomats said.
U.S. Special Representative for Syria Engagement James Jeffrey, who is expected at the Brussels conference, said in a statement that he would "reaffirm U.S. support for humanitarian assistance to all Syrians".
The conference also underscores Europe's dilemma in its efforts to isolate Assad as the United States pulls back its troops and the Syrian leader emerges victorious from the conflict, backed by Russia and Iran, diplomats say.
The EU has repeatedly made longer-term reconstruction support conditional on a U.N.-led peace process to end a war that has killed hundreds of thousands of people.
But with the U.N. process stuck, Russia's 2015 military intervention proving decisive for Assad, and Arab neighbours considering re-establishing diplomatic ties, European governments are divided over whether to rebuild.
"The U.S. is pulling out and the Russians don't have the money. That's the context," a second EU official said.
Germany, France and the Netherlands are forthright in defending a policy of withholding reconstruction money until a transition away from Assad is under way.
EU governments in January extended sanctions to prominent businessmen and their entities accused of developing luxury estate development and other projects for the Syrian government.
The EU has imposed an oil embargo on Syria as well as export restrictions, a freeze on central bank assets and hit 270 people and 72 entities with asset freezes and travel bans.
But Italy, Austria and Hungary, all fierce critics of European immigration policy and closer to Moscow, favour talking to Syrian authorities to allow millions of refugees to go home.
The European Commission has begun to put some money aside to help returning refugees, while the EU's foreign service is using satellite images to study potential areas of reconstruction, diplomats say.
(Additional reporting by Lesley Wroughton in Washington; Editing by Alison Williams) ((firstname.lastname@example.org; +32 2 287 6835; Reuters Messaging: email@example.com))