Two Lebanese soldiers die in camp battle overnight

NAHR AL-BARED, Lebanon, July 27 (Reuters) Lebanese troops were battling Islamist militants house-to-house at a Palestinian refugee camp today as the death toll from 10 weeks of fighting, Lebanon's worst since the civil war, rose to 248.

Security sources said two soldiers were killed in overnight exchanges, bringing to 122 the number of soldiers who have died since fighting against Fatah al-Islam militants at Nahr al-Bared camp in north Lebanon began on May 20.

A military source said yesterday the army was gradually occupying the last pockets controlled by the al Qaeda-inspired group in the heart of the camp, once home to 40,000 refugees.

Commandos were engaging militants with small arms fire, machineguns and grenades in close-quarter fighting, security sources said. Troops were moving in slowly because of mines and booby-traps.

More than 85 Fatah al-Islam fighters and 41 civilians have also been killed, while 65 militants have been detained and charged with terrorism -- a charge carrying the death penalty.

A political source, who said earlier this week that the army had begun the final phase of its assault, estimated there were about 100 people left in the area held by the militants -- 60 fighters and 40 women and children from their families.

Fatah al-Islam, which split from a Syrian-backed Palestinian faction last year, has Lebanese, Palestinians and other Arabs in its ranks, including some who have fought in Iraq. It says it supports al Qaeda's ideas, but has no direct links with it.

The conflict has further undermined stability in Lebanon, already crippled by a prolonged political crisis and shaken by bombings that have killed six UN peacekeepers and two anti-Syrian lawmakers in the past eight months.

Lebanon had witnessed an era of relative stability from the end of the 1975-1990 civil war until the assassination of former Prime Minister Rafik al-Hariri in 2005.

REUTERS AE SSC1321