Lebanon standoff at a turning point -- Violence could spread to rest of the country

Refugees fleeing from the besieged Palestinian refugee camp in Tripoli, Lebanon said anger over the Lebanese army's indiscriminate shelling had reached boiling point and sympathy was growing for the militant group Fatah al-Islam holed up inside the camp:

"The army have been killing us, they were hitting anything that moved," said 27-year-old Maher, who had left the camp the previous night for the relative sanctity of the nearby camp of Badawi. "Nobody can step out of their house without being shot at. Even inside the houses it isn't safe from the bullets."

Abu Ali, 45, added: "We have never experienced violence like this. Not even the Israelis behaved like this."

There were heavy exchanges of gunfire late on Thursday between Lebanese troops and militants inside, breaking a two day truce. Prime Minister Fuad Saniora vowed in a speech to wipe out the militants as reported by Associated Press:

"Prime Minister Fuad Saniora said in a televised address Thursday that Fatah Islam was "a terrorist organization." He blamed the group for "attempting to ride on the suffering and the struggle of the Palestinian people."

"We will work to root out and strike at terrorism, but we will embrace and protect our brothers in the camps," Saniora said, insisting Lebanon has no quarrel with the 400,000 Palestinian refugees who live in the country."

All of this started earlier this week when Lebanese police ended up inside the refugee camp while chasing bank robbers and got into a firefight with the well-armed Fatah Islam militants who are among many other groups who control the refugee camp. They are in no way unique among other similar groups and Fatah Islam has existed in the camp with the quiet acquiescence of the Lebanese government.
The firefight started because of intelligence failure and Lebanese army realized quickly how deeply the militants were entrenched in the camp.
Neither side wanted this fight in the first place, but now both are stuck in a standoff as the army refuses to back off without a complete surrender which Fatah Islam has refused to give and vows to fight till the last bullet:

Abu Salim Taha, a spokesman for the militants, countered on al-Jazeera television from inside the camp by saying it was the army that opened fire. He said the group's fighters remain committed to the truce.

However, Taha repeated that they will never surrender or flee. "This is impossible. We will fight until the last moment, the last drop of blood and the last bullet," he said.

The fleeing familes feel they are once again caught -- they have been refugees from Israeli occupation of Palestine and now they are refugees driven from their refugee camp.
So how this is likely to end?
Despite all the posturing by Lebanese Prime Minister, the Lebanese people dont have appetite for a protracted fight with this Palestinian group or any other as the government is already mired in fight with Hezbollah with no end in sight.
The stand-off is likely to continue for a long time with some kind of deal in the end.