By Nazih Siddiq
NAHR AL-BARED, Lebanon, May 29 (Reuters) - Sporadic fighting erupted on Tuesday between the Lebanese army and Sunni Islamist militants holed up in a battered Palestinian camp and there was no sign of an end to the 10-day standoff.
The clashes at the Nahr al-Bared camp in north Lebanon occurred while scores of Palestinian refugees in the Beddawi camp, who had fled from nearby Nahr al-Bared, held a protest to demand a permanent ceasefire to let them return home.
Intermittent clashes between Lebanese troops and al Qaeda-inspired Fatah al-Islam militants have punctured a fragile truce that was enforced last week to allow Nahr al-Bared's 40,000 refugees to flee due to lack of food, water and power.
One Lebanese soldier was killed early on Tuesday, bringing the death toll in Lebanon's worst internal fighting since the 1975-1990 civil war to at least 79 people -- 34 soldiers, 27 militants and 18 civilians.
The Lebanese government has demanded the militants surrender and face justice. Palestinian leaders mediating in the standoff say the Fatah al-Islam group refuses to hand over its fighters.
"The Palestinians' blood is too hot to handle and we cannot bear the consequences of spilled blood. We are not in this battle to attack Palestinians but to repel an attack against Palestinians and Lebanese," Prime Minister Fouad Siniora said.
NO IMMEDIATE MILITARY SOLUTION
The Palestinian leaders' plan also include a permanent ceasefire in the camp, the pullback of Fatah al-Islam fighters, and the deployment of a Palestinian force to oversee the truce.
"There is no progress in the efforts to find a solution. There is a need to move quickly but that is not happening," a Palestinian mediator, who asked not to be identified, said.
He said the crisis could deepen if it not resolved soon because the militants and their sleeper cells "will get the chance to catch their breath and launch attacks elsewhere. The Lebanese government must find a way out".
The government has played down an immediate military solution to the standoff and is reluctant to consider the army storming the camp because it could trigger violence at one or more of the 11 other refugee camps in the country.
The army is banned from entering the camps, home to some 400,000 Palestinians, under a 1969 Arab deal.
Members of Lebanon's anti-Syrian cabinet have described Fatah al-Islam as a tool of Syrian intelligence, though Damascus denies any links to the group.
"The first concern for the government and army is to remove the Palestinian civilians from inside the camp. After that the army will deal with Fatah al-Islam," Saad al-Hariri, head of the ruling government coalition bloc, told the pan-Arab al-Sharq al-Awsat newspaper.
"There will be no negotiations with those terrorists that came to Lebanon to carry out the orders of the Syrian intelligence."
The Lebanese authorities say Fatah al-Islam includes Arabs from Saudi Arabia, Algeria, Tunisia, Syria and Lebanon.
(Additional reporting by Nadim Ladki in Beirut)