By Nazih Siddiq
NAHR AL-BARED, Lebanon (Reuters) - Lebanese troops fought al Qaeda-inspired militants at a Palestinian refugee camp and clashed with Islamists early on Monday as a 16-day conflict threatened to plunge Lebanon into long-term instability.
Security sources said one Lebanese soldier was killed and two were wounded in clashes after midnight with Jund al-Sham gunmen at the northern entrance of Ain al-Hilweh, Lebanon's largest refugee camp, some 42 km (27 miles) south of Beirut.
The two-hour clash involving assault rifles, heavy machine guns, grenades and mortar bombs followed an earlier fight on Sunday which ended after mediation efforts by other Palestinian factions. Three soldiers and two civilians were wounded in the earlier firefight, started by the gunmen.
The fighting appeared to be an attempt by militants to open a second front for the Lebanese army which is locked in a battle to the death with Fatah al-Islam in the Nahr al-Bared camp in northern Lebanon.
Jund al-Sham is a very small group that has sided with Fatah al-Islam, though there are no apparent organizational links between the two.
In north Lebanon, troops pounded Nahr al-Bared sporadically throughout the night. Fatah al-Islam fighters have so far refused to lay down their weapons or surrender and have put up stiff resistance despite being vastly outgunned and outnumbered.
After 12 days of sporadic shelling, the army launched a new offensive against attacked Fatah al-Islam positions at the entrances of the camp on Friday with the declared aim of wiping out the militants.
The violence, which erupted on May 20, is Lebanon's worst internal fighting since the 1975-1990 civil war. At least 111 people have died and thousands have fled their homes.
The government, which sees the fighting as a battle against terrorists, accuses the militants of sparking the siege by attacking army positions near Nahr al-Bared and in Lebanon's second largest city, Tripoli.
The troops have seized and destroyed several positions of the Fatah al-Islam group and tightened their siege of the camp, which lies 100 km (60 miles) north of Beirut. But the militants were hitting back with grenades, mortar bombs and sniper fire.
At least 10 soldiers have died since Friday, bringing the military death toll to 44 in the conflict. More than 20 people -- militants and civilians -- have died in the camp since. Fatah al-Islam said it lost five fighters and about 36 in total.
At least 25,000 of Nahr al-Bared's 40,000 population have fled to other refugee camps over the past two weeks.
Lebanon's anti-Syrian government says Fatah al-Islam is a Syrian tool, but Damascus denies any links to the group and says its leader, Shaker al-Abssi, is on Syria's wanted list. Abssi and his comrades say they are inspired by al Qaeda's ideology.
Lebanon has been split by a seven-month-old political crisis over the opposition's demands for more say in government. The opposition includes Syria's allies, led by Hezbollah.
While the army has not entered the camp's official boundaries, it has captured the militants' positions on its outskirts, confining militants to about a third of the camp.
A 1969 agreement prevents the army from entering Lebanon's 12 Palestinian camps, home to 400,000 refugees.

Copyright 2007 Reuters Limited