(Adds end to south Lebanon fighting) By Jamal Saidi NAHR AL-BARED, Lebanon, June 3 (Reuters) - Lebanese troops directed artillery and tank barrages at al Qaeda-inspired militants dug in at a Palestinian refugee camp on Sunday, the third day of an intensified assault to crush the gunmen. But the Fatah al Islam militants at the Nahr al-Bared camp, who have vowed to fight to the death, put up stiff resistance and fought back with mortar bombs and rocket-propelled grenades. "If the army continues attacking, Nahr al-Bared will be, God willing, a graveyard for them," Abu Hurayra, one of the group's senior members, told Reuters by telephone from inside the camp. After 12 days of sporadic shelling, the army on Friday attacked Fatah al-Islam positions at the entrances of the camp with the declared aim of wiping out the militants. The fighting, which erupted on May 20, is Lebanon's worst internal violence since the 1975-1990 civil war. About 111 people have been killed and thousands have fled their homes. The government says militants triggered the siege by attacking army positions around the camp and in Lebanon's second largest city, Tripoli, in north Lebanon. In an indication that violence could engulf other parts of Lebanon, Islamist militants attacked an army checkpoint at another camp, Ain al-Hilweh in south Lebanon. That attack sparked fierce exchanges of rifle fire and grenades between soldiers and Jund al-Sham militants. The army brought in reinfoRcements and armoured vehicles mounted with heavy machine guns but the clash ended some two hours later after mediation by other Palestinian factions. They said two people were wounded and scores of civilians, with their belongings in plastic bags, fled the scene. One shop and a home at the edge of the camp were burnt. BOMBED-OUT BUILDINGS In northern Lebanon, troops seized and destroyed several positions of the Fatah al-Islam group and tightened their siege of Nahr al-Bared, which lies 100 km (60 miles) north of Beirut. Machine gun fire and shelling reverberated over the camp, while plumes of smoke rose from bombed-out buildings. "There is no square metre that has not been hit by a shell," one camp resident told Reuters by telephone. "We can't leave the building we are in, let alone the street, to find out the full extent of the devastation." An army source said the militants had fired at least two grenades at army positions from a mosque inside the camp. Security sources said 10 soldiers had been killed since Friday. Palestinian sources said a militant commander, Naim Ghali aka Abu Riyadh, was killed by an army sniper on Saturday. Since Friday, more than 16 people -- militants and civilians -- have died in the camp. The group said it lost five fighters. 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. (Additional reporting by Yara Bayoumy, Nadim Ladki and Laila Bassam)
