Palestinians seek end to Lebanon standoff

BEIRUT, May 28 (Reuters) Palestinian leaders today tried to end a bloody standoff between the Lebanese army and Islamist militants holed up in a refugee camp - the battleground for Lebanon's worst fighting since the civil war.

Worried that violence could spill over to other Palestinian camps, the government is giving the Palestinian factions time to try to deal with the Fatah al-Islam group, which has been battling the army around the Nahr al-Bared camp since May 20.

''What is slowing down the army is the realisation that we could have a nationwide problem,'' said Timur Goksel, an expert on security affairs in Lebanon. ''This would mainly be a reaction if the Palestinian civilian suffering was heavy.'' Lebanon's worst internal fighting since the 1975-1990 civil war has killed at least 78 people, including 33 soldiers, 27 militants and 18 civilians.

Sporadic gunfire continued in the early hours today. At least three explosions rocked the frontline in the afternoon.

The army said in a statement it had opened fire when fired upon and destroyed Fatah al-Islam fortifications, ''causing definite casualties in the ranks of the militants''.

But the already stretched army has been unable to deal the militants a decisive blow from its positions around the camp, which it is banned from entering under a 1969 Arab agreement.

Abu Emad al-Refaie, the Lebanon representative of the Palestinian group Islamic Jihad, told Reuters the Palestinian factions had yet to agree on how to ''end the phenomenon of Fatah al-Islam peacefully''.

The Lebanese government is concerned that more heavy army action could trigger violence at other Palestinian camps in Lebanon, which are autonomous enclaves and home to some 400,000.

Refaie said: ''The military solution is no longer an option.'' The Lebanese official responsible for the government's ties with the Palestinian factions said there would be no backing down from its demand for ending Fatah al-Islam's presence in Lebanon and putting its members on trial.

''The Palestinian factions know very well that the priority for the government is not to go easy on or be silent on these crimes,'' Khalil Makawi said.

''ILLOGICAL PROPOSALS'' The Lebanese government has demanded the handing over of Fatah al-Islam militants, many of whom are not Palestinian. It accuses the group of starting the conflict by attacking army positions around Nahr al-Bared and the northern city of Tripoli.

Fatah al-Islam says it is fighting in self-defence. ''We have not discussed the matter of handing them over,'' Refaie said.

The factions had agreed other points including the formation of a Palestinian committee to shore up security in the camp, he said.

A Fatah al-Islam spokesman said the group would not hand over any of its fighters. ''This is impossible,'' Abu Salim Taha said by telephone from inside the camp.

Fatah al-Islam was not in direct contact with the Palestinian factions but was talking to religious leaders in the camp, he said.

''There is some mediation,'' he said.

The Lebanese authorities say Fatah al-Islam includes Arabs from Saudi Arabia, Algeria, Tunisia, Syria and Lebanon.

Saudi Ambassador Abdul-Aziz Khojah said four Saudi militants with Fatah al-Islam had been killed in the fighting. He told the pan-Arab al-Hayat newspaper on Sunday that members of the group of several Arab nationalities shared the ideology of al Qaeda.

More than half Nahr al-Bared's 40,000 residents have fled, mostly to the nearby Beddawi camp, which relief workers say is now seriously overcrowded.

Members of Lebanon's anti-Syrian cabinet have described Fatah al-Islam as a tool of Syrian intelligence. Fatah al-Islam broke away from the Syrian-backed Fatah al-Intifada group last year. Damascus denies any links to Fatah al-Islam.

REUTERS KK KN2045