Fierce fighting erupted at a besieged Palestinian refugee camp in northern Lebanon on Monday as army troops pounded the remaining hideouts of al-Qaida-inspired militants holed up inside with artillery and tank fire, witnesses said. The heavy bombardment signaled that the Lebanese army is stepping up its nearly two-month-old offensive against Fatah Islam fighters entrenched in the Nahr el-Bared camp located on the outskirts of the northern port city of Tripoli. Lebanese troops unleashed artillery shells and tank fire at Fatah Islam positions inside the camp starting around 6 a.m. (0300 GMT) Monday, said an Associated Press Television News cameraman, standing a few hundreds meters from the war-ravaged shantytown. The intense bombardment, which lasted nearly three hours, sent plumes of heavy black smoke billowing into the air that covered the camp, he said. He added that the army was using armored bulldozers and other vehicles to push its way into the camp, part of its declared strategy to tighten the noose around the militants. In response, Fatah Islam militants unleashed volleys of rocket-propelled grenades and machine gun fire at army positions surrounding the camp. No casualties or injuries were immediately reported. The militants also fired at least five Katyusha rockets and mortar shells that landed in areas outside the camp, causing damage but no casualties, the state-run National News Agency reported. One of the rockets landed near a school about 3 kilometers (2 miles) from the camp, but failed to explode, it said. In Monday's fighting, the army destroyed a number of rocket launchers and hideouts used by the gunmen to attack troops, the NNA said. It added that three snipers were reported killed overnight. The APTN cameraman said he heard the din of machine gun fire in the distance, possibly indicating house-to-house fighting. On Sunday, Lebanese infantry battled Fatah Islam militants at close range, moving deep into the Nahr el-Bared camp and hoisting Lebanon's red-and-white flag atop newly seized buildings, security officials and witnesses said. Two soldiers were killed Sunday in the army's deepest push yet into the Nahr el-Bared camp, bringing to 98 the number of troops who have died during the conflict that began on May 20. Fatah Islam militants fired at least 11 Katyusha rockets Sunday from the camp that landed in farm fields in the northern Akkar region, a few kilometers away, security officials said. No casualties were immediately reported. The officials spoke on condition of anonymity because they were not authorized to speak to the media. The use of Katyusha rockets appears to be a new tactic by the militants to ease the military pressure and expand the battles outside the camp. Fatah Islam fired at least 25 Katyusha rockets last week that crashed into villages neighboring the camp, slightly injuring two people and causing damage to property. The conflict with Fatah Islam militants holed up in the camp has been Lebanon's worst internal violence since the 1975-90 civil war. At least 60 militants and more than 20 civilians have been killed in the fighting, according to the Lebanese government and U.N. relief officials. Witnesses Sunday reported seeing several Lebanese flags flying on the roofs of destroyed buildings inside the camp, signaling progress by the army. "We seized new buildings and hideouts of Fatah Islam militants," said a senior military official, speaking on condition of anonymity because he was not authorized to give official press statements. The NNA said the army was encircling a group of fighters hiding in one of their shelters in the camp. It said the army had killed a number of fighters, whose bodies were lying in the streets. Sultan Abuleinein, head of Palestinian President Mahmoud Abbas' Fatah faction in Lebanon, told reporters in the nearby Beddawi refugee camp Saturday that "not more than 70" Fatah Islam fighters remained in Nahr el-Bared. Earlier it was estimated that several hundred were hiding in the camp.