| NAHR AL-BARED, Lebanon
NAHR AL-BARED, Lebanon Battles engulfed a Palestinian refugee camp in north Lebanon on Monday in the second day of fighting between the Lebanese army and al Qaeda-inspired militants which has killed 79 people.
Black smoke billowed from the Nahr al-Bared camp, home to 40,000 Palestinians, as tanks shelled positions held by Fatah al-Islam fighters hitting back with machinegun and grenade fire.
In the capital Beirut, a bomb rocked a shopping area in the mainly Sunni Muslim district of Verdun wounding at least seven people, security sources and witnesses said.
Fighting subsided in the afternoon amid efforts to allow an aid convoy into the coastal camp in north Lebanon, but clashes resumed before the U.N. and Red Cross vehicles could move in.
Prime Minister Fouad Siniora's government, at a meeting on Monday to discuss the fighting, stressed the need "to put an end" to Fatah al-Islam, Information Minister Ghazi Aridi said.
The decision came after a representative of the Palestinian Islamic Jihad group told Reuters a truce had been agreed, although sporadic gunfire could still be heard into the night.
The violence showed how fragile security remains in Lebanon, racked by political and sectarian tensions since last year's Israeli-Hezbollah war in the south and by a series of unsolved assassinations before and after Syria's 2005 troop pullout.
The conflict is Lebanon's worst internal violence since the 1975-90 civil war.
Palestinians in the camp said thousands had fled their homes on the edges of Nahr al-Bared, where fighting was most intense, to shelter deeper inside the camp. More than 150 people had been wounded and dozens of homes destroyed, Palestinian sources said.
"We are under siege," Palestinian Hisham Yacoub said by telephone from within the camp. "There's no water, no electricity or milk for the children," said Mohammed Abu Laila, also talking by phone from the camp.
Abu Salim, a spokesman for Fatah al-Islam, threatened to take the fighting to other parts of the country if the army did not ease its bombardment. "If the situation stays like this we will not be silent and will definitely move the battle outside (the nearby city) of Tripoli," he told Reuters by telephone.
At least 20 militants, 32 soldiers and 27 civilians have been killed since the fighting erupted early on Sunday. Fifty-five soldiers have been wounded.
The United States, which firmly backs the Beirut government, said Lebanon was justified in attacking the militants.
"Extremists that are trying to topple that young democracy need to be reined in," said U.S. President George W. Bush.
But Bush, though deeply distrustful of Syria's role in Lebanon, stopped short of accusing Damascus of involvement.
"I'll be guarded on making accusations until I get better information, but I will tell you there's no doubt that Syria was deeply involved in Lebanon. There's no question they're still involved in Lebanon," Bush told Reuters.
Syrian Foreign Minister Walid Moualem repeated his country opposed Fatah al-Islam and wanted to arrest its leaders. "Our forces have been after them, even through Interpol," he said.
Fatah al-Islam, a Sunni Muslim group which emerged late last year, has only a few hundred fighters and scant political support in Lebanon. Based in Nahr al-Bared, it is thought to have links with jihadist factions in other Palestinian camps.
Lebanese forces detained 20 members of the group, including Saudis, Algerians, and a Tunisian, a security source said.
Rival Lebanese factions have condemned the attacks on the army, which carefully reflects the country's mosaic of sects.
Palestine Liberation Organization representative Abbas Zaki said after talks with Siniora that the camps housing 400,000 Palestinians refugees, a legacy of the Arab-Israeli war of 1948, should not be "the spark that starts a civil war".
Monday's blast appeared to mirror an explosion on Sunday that killed one woman in the mainly Christian east of the capital. At least 10 people were wounded by flying glass.
Lebanese government ministers say Fatah al-Islam is a tool used by Syria to stir instability in an effort to derail U.N. moves to set up an international court to try suspects in the 2005 killing of former Prime Minister Rafik al-Hariri.
Fatah al-Islam's leader, Shaker al-Abssi, was sentenced to death in Jordan in absentia for the 2002 killing of a U.S. diplomat. Abu Musab al-Zarqawi, the slain chief of al Qaeda in Iraq, received a death sentence for the same crime.
Abssi, a Palestinian guerrilla in his 50s, was jailed in Syria and fled to Lebanon after he was released last year.
Under a 1969 Arab accord, Lebanon's army may not enter the refugee camps, leaving a security vacuum filled by Palestinian factions.
Palestinian guerrillas established bases in Lebanon in the late 1960s and took part in the civil war that erupted in 1975.
(Additional reporting by Tom Perry, Yara Bayoumy, Leila Bassam, Nadim Ladki and Steve Holland)