Hezbollah defiant as fighting rocks Beirut

By Nadim Ladki

BEIRUT (Reuters) - Fierce clashes raged in Beirut on Thursday after the Iranian-backed group Hezbollah said the U.S.-supported Lebanese government had declared war by targeting its military communications network.

Security sources said the fighting killed at least 10 people and wounded 20. The thud of exploding grenades and crackle of automatic gunfire echoed throughout the night in the worst internal strife since the 1975-90 civil war.

Governing coalition leader Saad al-Hariri proposed a deal to end the crisis under which the government decisions that infuriated Hezbollah would be considered a "misunderstanding".

The decisions would then be referred to the Lebanese army, which has been neutral in the confrontations, giving army commander General Michel Suleiman the option to suspend their implementation.

But Hezbollah's al-Manar TV later quoted an opposition source as rejecting any ideas for ending the conflict other than those proposed by Hezbollah leader Sayyed Hassan Nasrallah earlier on Thursday. Nasrallah had demanded measures taken by the government this week be rescinded.

The U.N. Security Council called for "calm and restraint", urging all sides to return to peaceful dialogue. The White House urged Hezbollah to stop "disruptive" acts.

Fighters from the Shi'ite movements Hezbollah and Amal exchanged assault rifle fire and rocket-propelled grenades with pro-government gunmen, including fighters loyal to the Sunni Future movement, in several areas of the capital.

Security sources said Hezbollah gunmen overran at least five offices of Hariri's Future group and police-guarded houses of pro-government officials. Many cars and shops were set on fire and scores of terrified civilians fled the hot spots.

Hezbollah launched a new campaign of street protests on Wednesday, piling pressure on the government after it declared Hezbollah's communications network illegal and removed the head of airport security, a figure close to the group, from his post.

Supporters of Hezbollah and its allies have blocked roads leading to the airport -- Lebanon's only air link to the outside world -- and other main streets, paralyzing much of the capital.

The airport was barely functioning with only a few flights arriving and taking off, airport officials said.

"CUT THE HAND"

Fighting escalated minutes after Hezbollah chief Sayyed Hassan Nasrallah said the only way out of the crisis was for the government to rescind the decisions and attend talks to end the political conflict with the Hezbollah-led opposition.

"This decision is first of all a declaration of war and the launching of war by the government... against the resistance and its weapons for the benefit of America and Israel," he said.

Nasrallah described the fixed-line network that connects the group's officials, military commanders and positions as a vital part of the military structure of the group, which fought a 34-day war with Israel in 2006.