Gunbattles raged between Lebanese troops and Islamist militiamen on Tuesday, with both sides vowing to pursue the fighting that has killed 58 people in the last three days.
Black plumes of smoke billowed into the sky as troops fired tank shells and artillery at positions of Al-Qaeda inspired militants entrenched in the densely populated Palestinian refugee camp of Nahr Al-Bared in northern Lebanon.
It is the bloodiest internal feuding in Lebanon since the 1975-1990 civil war and has triggered deep concerns about the security of a country still battling deep sectarian and political tensions.
The new bout of fighting between troops and the Sunni Muslim Fatah al-Islam militants shattered an overnight lull and followed indirect negotiations to try to reach a ceasefire amid mounting fears of a humanitarian crisis for people trapped inside Nahr al-Bared.
Fatah Al-Islam remained defiant, with spokesman Abu Salim Taha insisting in a telephone call with AFP that "if the army continues its attacks, our fighters are ready to fight until the last drop of blood."
The group, which had warned it would take its fight beyond Nahr al-Bared and the nearby Mediterranean port city of Tripoli, also claimed in a statement it was behind two bomb attacks in Beirut over the past two nights.
In the face of the continuing battles, the Lebanese government said at meeting late on Monday it would crush the "terrorist phenomenon" of Fatah Al-Islam with all its might.
"(The government) is determined to respond to any aggression and put a final end to this dangerous phenomenon... which has threatened to widen the scope of the aggression," said Information Minister Ghazi Aridi.
"This phenomenon which attacked the Lebanese army and other security forces is harmful to all of Lebanon, its people, security and stability, and is a permanent threat to the Palestinian people."
He said identity checks of the militants killed have revealed that most of them are not Palestinians, but have different nationalities.
The fragility of the situation in Lebanon was underscored by the second bomb blast in the Beirut on Monday which injured 10 people, the day after a one woman was killed in the a similar attack in the capital.
A total of 58 people have been killed in the fighting unleashed early Sunday around the camp and in Tripoli. Hospital sources said 30 soldiers, 17 Islamist fighters, 10 Palestinian civilians and a Lebanese civilian have died.
Aid organisations have voiced fears of a humanitarian crisis in the impoverished camp, a coastal shantytown of narrow alleyways is home to about 31,000 of the 400,000 Palestinian refugees living in Lebanon.
Doctors described seeing bodies strewn on the streets of Nahr al-Bared on Monday, when nine refugees were killed in the Lebanese bombardment, while residents are reporting a lack of electricity and water shortages.
The camp is one of about 12 in Lebanon but under a four-decade old agreement it remains remains outside the authority of the government, creating a security vacuum that allows armed Palestinian factions to take control.
The international community has condemned the violence and voiced support for the Lebanese government's efforts to restore order.
"It would appear that the Lebanese security forces are working in a legitimate manner to provide a secure and stable environment for the Lebanese people, in the wake of provocations and attacks," the US State Department said.
UN chief Ban Ki-moon regards the Fatah al-Islam actions as "an attack on Lebanon's stability and sovereignty," the secretary general's spokeswoman said.
But Syria said the turmoil was a bid to prod the UN Security Council into setting up an international tribunal to try suspects in the murder of Lebanese ex-premier Rafiq Hariri, for which Damascus has been widely blamed.
Syria's UN Ambassador Bashar Jaafari also denied any ties between Damascus and Fatah al-Islam, whose Palestinian leader Shaker al-Abssi was released from prison in Syria last year.
The group denied it was linked to "parties and states outside Lebanon," saying in a statement: "It is now time to clarify that our only relation is with God Almighty and our only allegiance is to faith and jihad (holy war)."
Lebanon's Western-backed government has been paralysed for months by feuding between opponents of former power broker Damascus and pro-Syrian factions including Hezbollah, largely over the creation of the court.
MP Wael Abu Faour, a member of Lebanon's anti-Syrian parliamentary majority, told AFP that the Beirut blasts "confirm what the Syrians want: that the establishment of the tribunal will mean instability in Lebanon."
Syria pulled out its troops from Lebanon in 2005 amid an international and domestic furore over the Hariri murder but it still wields enormous influence in its smaller neighbour.
In Beirut, traffic was slow as many residents stayed home and kept their children from school after latest bombings in the capital, which has been shaken by a string of attacks against Damascus critics over the past two years.
The government also called on businesses and institutions to observe a 10-minute work stoppage at noon (0900 GMT) to mourn the military and civilian deaths.
