(Adds statement from EU, details) By Nazih Siddiq NAHR AL-BARED, Lebanon, July 19 (Reuters) - The Lebanese army shelled al Qaeda-inspired militants cornered in parts of a Palestinian refugee camp on Thursday and security sources said two more soldiers were killed in the fighting. They said one soldier was killed on Wednesday and the body of another was pulled from rubble in Nahr al-Bared camp, raising the army toll to 111 dead since fighting began on May 20. The army has pushed slowly into the camp, fighting close-quarter battles with Fatah al-Islam militants after bombarding its positions with artillery and tank fire to try to force the group to surrender. At least 233 people have been killed in what is Lebanon's worst internal violence since the 1975-1990 civil war. Witnesses said the army concentrated its latest artillery shelling on pockets still held by Fatah al-Islam near the camp's main road and the northeastern area. They said the militants fired about 16 Katyusha rockets in a repeat of similar attacks that have hit surrounding villages in the past few days. "The militants are surrounded in the middle of the camp. The army is occupying new areas, clearing buildings and reinforcing areas that it has already captured," a military source said. SUICIDE BOMBERS Fatah al-Islam spokesman Abu Salim Taha told the pro-Syrian newspaper Ad-Diyar his group had hundreds of members willing to act as suicide bombers if the army did not stop its assaults. "We are ready to move to the next level and there are many cards we haven't played yet. If the army insists on continuing the battles, we will use one of these cards," said Taha. "We have hundreds of martyrs who were prepared to go to Palestine who will detonate themselves on the Lebanese army if the battles continue," he added. On Wednesday, Taha, who had been silent for more than a month, surfaced in a telephone interview with Al Jazeera television in which he said the group was ready to resume peace talks. The army ignored his offer. Taha did not say whether the group's potential suicide bombers were inside Nahr al-Bared or elsewhere. At least 81 militants have died in fighting. Fatah al-Islam was estimated to have a few hundred mainly foreign Arab fighters at the outset. Repeated mediation efforts, mainly by Palestinian faction leaders and clerics, have failed to end the fighting in which 41 civilians have also been killed. The Nahr al-Bared violence is undermining stability in Lebanon, already paralysed by a political crisis and shaken by fatal bombings whose victims include two anti-Syrian politicians and six U.N. peacekeeping troops in the past eight months. In Brussels, the European Union condemned Fatah al-Islam's attacks on the Lebanese army. "(The Council) reiterates its condemnation of the attacks on Lebanese security forces by terrorist groups operating from Palestinian camps," said the statement agreed by EU ambassadors and due to be adopted by EU foreign ministers next week. (Additional reporting by Ingrid Melander in Brussels)
