The clashes between troops surrounding the Nahr el-Bared camp and Fatah Islam fighters began early in the morning shortly after police raided a militant-occupied apartment on a major thoroughfare in Tripoli and a gunbattle erupted, witnesses said.
Hundreds of Lebanese applauded at the army as its tanks shelled the camp — a sign of the long-standing tensions between some Lebanese and the tens of thousands of Palestinians who took refuge from fighting in Israel over the past decades.
"We strongly back the Lebanese army troops and what they are doing," said Abed Attar, a resident of Tripoli who stood watching the tanks fire into the camp while others cheered.
Ten militants were killed in the building in Tripoli and seven in the refugee camp, security officials said. They said 22 soldiers had also been killed.
The violence adds one more destabilizing factor to conflict-ridden Lebanon, already in the midst of its worst political crisis between the Western-backed government and pro-Syrian opposition since the end of the 1975-90 Lebanese civil war.
It was a rare clash between the Lebanese army and militants and the first major fighting between the security forces and Palestinians since the early 90s when troops fought Palestinian guerrillas in Ein el-Hilweh refugee camp in southern Lebanon.
The tiny Fatah Islam is an offshoot of the pro-Syrian Fatah Uprising, which broke from the mainstream Palestinian Fatah movement in the early 1980s and has headquarters in Syria.
The group is allegedly led by Shaker Youssef al-Absi, a Palestinian living in Syria who was sentenced to death in absentia in July 2004 by a Jordanian military court. Al-Absi was found guilty of conspiring to terrorism in a plot that lead to the assassination in Jordan of U.S. diplomat Laurence Foley. Former al Qaeda in Iraq leader Abu Musab al-Zarqawi was accused of masterminding the killing.
Some Lebanese security officials now consider Fatah Islam a radical Sunni Muslim group with ties to al Qaeda, or at least al Qaeda style militancy and doctrine. But some anti-Syrian government officials say they are a front for Syrian military intelligence aimed at destabilizing Lebanon.
Syria, which has been fighting its own Sunni militancy, said it had temporarily closed two border crossings with northern Lebanon because of safety concerns over the clashes.
A senior security official said a high-ranking member of Fatah Islam, known as Abu Yazan, was among those killed. Security officials spoke on condition of anonymity because of the sensitivity of the issue.
A Fatah Islam spokesman, Abu Salim said he had no information on the report.
"Many houses have been destroyed," Abu Salim told The Associated Press by phone from inside the camp.
The fighting injured 19 soldiers and 14 police officers, security officials said.
Authorities said the raid that triggered the clashes was part of a police search for suspects in a bank robbery a day earlier in Amyoun, a town southeast of Tripoli. Gunmen made off with $125,000 in cash in the robbery.
The armed militants resisted arrest and a gunbattle ensued. It spread to surrounding streets and continued through the afternoon.
Witnesses said the militants then seized Lebanese army positions at the entrance to the camp, capturing two armored carriers. The gunmen also opened fire on roads leading to the city and ambushed a military unit, killing two soldiers, security officials said.
Smoke billowed from the camp as a steady barrage of artillery and heavy machine gun fire from army positions pounded militant positions inside.
By midmorning, the army had brought reinforcements and was firing on Fatah Islam positions.
Prime Minister Fuad Saniora said the fighting was a "dangerous attempt at hitting Lebanese security" and called on the Lebanese to rally behind the government.
As many other small factions in Lebanon, Fatah Islam's allegiance is sometimes questionable in this deeply polarized country.
Major Palestinian factions have dissociated themselves from Fatah Islam.
The dozen Palestinian refugee camps scattered in Lebanon are off limits to authorities, and some are controlled by armed guerrillas. Lebanese troops usually cordon off the camps with checkpoints. Their presence around Nahr el-Bared increased in recent months after Fatah Islam stepped up its actions.
The Lebanese army fought the Israelis occasionally during last summer's war. The army also played a major role in quelling Shiite-Sunni disturbances and riots in January in Beirut.
In 2000, Lebanese army fought major gun battles with Lebanese Islamic militants in which more than a dozen people were killed in Dinniyah, in the remote mountains near Tripoli.