Lebanon's prime minister vowed to wipe out an Islamic militant group barricaded in a Palestinian refugee camp, raising the prospect that the army will either storm the camp, in what would likely be a bloody battle, or dig in for a long siege to force its surrender. Sporadic gunfire Thursday, which grew heavier for a short period after nightfall, marred the two-day-old truce as the army moved troops around the Nahr el-Bared camp. But the troops did not attempt to advance, apparently giving time for negotiations and for the militants to comply with a government ultimatum to surrender or face a military assault. Fighters from the al-Qaida-inspired Fatah Islam militant group, estimated in the hundreds, have barricaded themselves in the camp, saying they will fight off any Lebanese attack. The renewed exchanges Thursday night, which each side blamed on the other, illustrated the precarious nature of the standoff and the possibility of increased violence at any time. Security officials, who spoke on condition of anonymity because they were not allowed to talk to reporters, said army positions came under heavy machine gun fire from Fatah Islam militants followed by rocket-propelled grenades. They said the army "dealt" with the source of fire. 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 fighting, which broke out Sunday when police raided suspected Fatah Islam hideouts in Tripoli while searching for men wanted in a bank robbery, has killed some 50 combatants and many civilians. Thousands of Palestinian civilians - mainly women and children - have fled the camp on the outskirts of this northern port city, but many thousands remain inside. Most of those fled the camp after the truce took hold Tuesday packed into the nearby Beddawi refugee camp. They lined up at UN-run schools and clinics with registration cards, hoping to get food and mattresses. The camp's six schools were overflowing with refugees, who said up to 50 people were sleeping in each classroom. More refugees trickled out of Nahr el-Bared on Thursday. They packed themselves into a few pickup trucks or walked out to the first army checkpoints, where they were inspected and allowed to go on. "How many times do we have to be displaced?" cried Palestinian refugee Nohad Abdel-Al, wearing a black robe and a black headscarf. "Have mercy on us! Have mercy on us!" she told the troops, holding an infant in her arms. Her husband, Bakri Abdel-Al, said the family's two-story house had been destroyed and that they had decided to leave Thursday "because we are now hearing the fighting will resume." Amid reports of Muslim clerics negotiating with the militants to avert an army onslaught, Lebanon's government appeared to be preparing for the possibility of storming of the camp. The Lebanese military stays out of the camps under a 1969 agreement that allows the Palestinians to run them. 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. Storming the Nahr el-Bared camp - a densely built-up town of narrow streets on the Mediterranean coast - could mean rough urban fighting for Lebanese troops and further death and destruction for civilians. It could also spark unrest in Lebanon's 11 other Palestinian refugee camps. Although Palestinian factions have dissociated themselves from Fatah Islam, refugees in other camps, which are rife with armed groups, were seething with anger over the army bombardments that have partially destroyed Nahr el-Bared. In a sign of the danger, a bomb exploded Wednesday night in the Aley mountain resort overlooking Beirut, a 90-minute drive south of Nahr el-Bared. The blast, which wounded 16 people, was the third in the Beirut area since Sunday. One person has been killed and a dozen injured in the two other attacks. Fatah Islam has denied responsibility for the bombings, but it had threatened to take the battle outside Tripoli if the army attacks. A senior army official disclosed Thursday that troops had sunk two small boats carrying Fatah Islam militants who tried to flee from the camp on Tuesday via the sea. The official said all passengers on the two dinghies were killed, but did not say how many had died. But Taha, the militant spokesman, denied that. "Fatah Islam does not own any boat so how can those boats be destroyed?"