U.S. & World News

TRIPOLI, Lebanon (CBS) ― Artillery and machine gun fire echoed around a crowded Palestinian refugee camp Tuesday for a third straight day as the Lebanese government ordered the army to finish off Islamic militants holed up inside.

Angry Palestinians burned car tires in two other refugee camps in an ominous sign that the trouble could spread across Lebanon. The fighting between the Lebanese army and the Al Qaeda inspired group Fatah Islam has raised fears of a backlash among the hundreds of thousands of Palestinians in Lebanon's other refugee camps, where Islamic extremists have been growing in influence.

At the Nahr el-Bared camp on the outskirts of the northern port of Tripoli, black smoke billowed from the area after artillery and machine gun exchanges between troops and militants.

A cease-fire declared in the afternoon by the militants collapsed within an hour as fighting resumed between Lebanese troops and militants holed up in the camp. It was the third failed attempt at a truce.

Inside the city of Tripoli, security forces moved in against a suspected Fatah Islam hide-out in an apartment building, witnesses said. After receiving a tip about armed men in an apartment, shots rang out at midmorning as security forces raided the building using tear gas. The apartment was gutted when the army threw in hand grenades, but apparently no one was caught.

CBS News correspondent Mark Phillips reports that Fatah Islam had been largely involved in the Iraq insurgency until now, but its recent militancy within Lebanon has brought down the wrath of the shaky government.

The developments demonstrated the government's determination to pursue an estimated 100 militants from Fatah Islam operating out of the camp where some 31,000 Palestinian refugees live. The militants have killed 29 soldiers since Sunday and about 20 of the fighters have also been killed, as well as an undetermined number of civilians.

Now there are fears Lebanon's worst internal violence since the 1975-90 civil war could spread, adding yet another layer of instability to an uneasy balancing act among numerous sects and factions vying for power. Prime Minister Fuad Saniora's Western-backed government already faces a domestic political crisis, with the opposition led by Iranian- and Syrian-backed Hezbollah demanding its removal.

Lebanon's Cabinet late Monday authorized the army to step up its campaign and "end the terrorist phenomenon that is alien to the values and nature of the Palestinian people," Information Minister Ghazi Aridi said.

Reports emerging from the camp spoke of heavy destruction with food and medical supplies running out. The reports could not be confirmed because officials and reporters could not enter. A U.N. relief staffer reported of dozens of houses destroyed on top of families.

Meanwhile, dozens of angry Palestinians burned tires in the southern camp of Ein el-Hilweh, Lebanon's largest. Protesters also burned tires in Rashidiyeh camp in the south.

Relief supplies could not enter Nahr el-Bared as the U.N. Relief and Works Agency scrambled to evacuate one of its employees, a Palestinian aid worker wounded Monday, Taleb al-Salhani of UNRWA said.

The army stopped six UNRWA trucks, including a water tanker, saying it was too dangerous to enter the camp. They were left parked by the roadside. Al-Salhani said he hoped for a cease-fire later in the day to allow the U.N. convoy through.

Lebanese authorities do not enter the refugee camps under a nearly 40-year-old agreement with the Palestinians.

Taha said Fatah Islam managed to repulse several attempts by Lebanese troops to advance on their positions inside the camp. But reporters at the scene said the army only pushed the militants from posts at the camp's outskirts without actually entering it.

"The shelling is heavy, not only on our positions, but also on children and women. Destruction is all over," Taha told the AP by telephone from inside the camp.

Refugees have been hiding in their homes inside the camp and Palestinian officials there said nine civilians were killed Monday.

The tens of thousands of Palestinians in the camp live in two- or three-story white buildings on densely packed narrow streets. It is one of more than 12 impoverished camps housing more than 215,000 refugees, out of a total of 400,000 Palestinians in Lebanon.

Major Palestinian factions have distanced themselves from Fatah Islam, which arose here last year and touts itself as a Palestinian liberation movement. But many view it as a nascent branch of Al Qaeda-style terrorism with ambitions of carrying out attacks around the region.

The group's leader, Palestinian Shaker al-Absi, has been linked to the former head of Al Qaeda in Iraq and is accused in the 2002 assassination of a U.S. diplomat in Jordan. He moved into Nahr el-Bared last fall after being expelled from Syria, where he was in custody.

Since then, he is believed to have recruited about 100 fighters, including militants from Saudi Arabia, Yemen and other Arab countries, and he has said he follows the ideology of Al Qaeda leader Osama bin Laden. Among the militants killed in fighting Sunday was a man suspected in a plot to bomb trains in Germany last year, according to Lebanese security officials.

Beirut security officials accuse Syria of backing Fatah Islam to disrupt Lebanon. The charges are denied by Syria, which controlled Lebanon until 2005 when its troops were forced to withdraw from the country following the assassination of former Lebanese prime minister Rafik Hariri.

Major Palestinian faction leaders met with Saniora for the second time in as many days. European Union foreign policy chief Javier Solana arrived Tuesday in Beirut to discuss the crisis.

Mufti Salim Lababidi, a Sunni spiritual leader of Palestinians in Lebanon, denounced the shelling which he claimed has killed or wounded 100 civilians.

"There are a thousand ways to uproot Fatah Islam. ... There are ways other than this," he said on Al-Jazeera television.

Late Monday, an explosion went off in a shopping area in a Sunni Muslim sector of Beirut, wrecking parked cars and injuring seven people - a day after a bomb in a Christian part of the capital killed a woman. The confluence of two bombings while the fighting was going on in Tripoli was highly unusual.

Taha, the Fatah Islam spokesman, denied his group was behind the Beirut bombings.

The White House said it supports Saniora's efforts to deal with the fighting, and the State Department defended the Lebanese army, saying it was working in a "legitimate manner" against "provocations by violent extremists" in the camp.

(© 2007 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)