TRIPOLI, Lebanon – Lebanese army tanks pounded a shadowy group suspected of ties to al-Qaida on Sunday, targeting its hideouts inside a Palestinian refugee camp after hours of clashes killed at least 22 soldiers and 17 militants.

The violence between the army and the Fatah Islam group erupted both in the northern port city of Tripoli and the adjacent Nahr el-Bared refugee camp. It added further instability to a country already mired in its worst political crisis between the Western-backed government and Hezbollah-led opposition since the end of the 1975-90 Lebanese civil war.

It was the most serious fight the army had engaged in Lebanon in more than a decade and the worst violence to hit Tripoli in two decades.

The clashes between army troops surrounding the camp and Fatah Islam fighters began after a gunbattle raged in a neighborhood in Tripoli, a predominantly Sunni city known to have Islamic fundamentalists, witnesses said.

Fighting spread after police raided suspected Fatah Islam hideouts in several buildings in Tripoli, searching for men wanted in a recent bank robbery. A gunbattle ensued and troops were called in to help the police.

Militants then burst out of the refugee camp, seizing Lebanese army positions, capturing two armored vehicles and ambushing troops. They killed two soldiers on roads leading to the city.

Smoke billowed from the camp as a steady barrage of artillery and heavy machine gunfire from army positions pounded militant positions inside.

Security forces were able to quell the resistance in Tripoli after sundown, and troops seized all positions around the refugee camp late Sunday, the army said.

In Beirut late Sunday, an explosion across the street from a busy shopping mall killed a 63-year-old woman and injured 12 other people in the Christian sector of the Lebanese capital, police said.

A wall in the woman’s nearby apartment collapsed on her from the impact of the blast, said the Lebanese Broadcasting Corp., a Christian TV station.

The bomb left a crater about 4 feet deep and 9 feet wide, and police said the explosives were estimated to weigh 22 pounds. The blast _ heard across the city – gutted cars, set vehicles ablaze and shattered store and apartment windows.

Beirut and surrounding suburbs have seen a series of explosions in the last two years, many targeting Christian areas. Authorities blamed Fatah Islam for Feb. 13 bombings of commuter buses that killed three people, but the group denied involvement.

Cabinet minister Pierre Pharaon said Sunday’s explosion was aimed at undermining Lebanon’s security as the U.N. Security Council considers imposing an international tribunal to try suspects in the assassination of former Premier Rafik Hariri.

A U.N. investigation has linked Syrian and Lebanese security officials to the 2005 truck bombing that killed Hariri, and it has been expanded to include the other Beirut attacks.

Syria has denied involvement in any of the bombings, but the country was forced to withdraw its army from Lebanon after a 29-year presence two months after Hariri’s assassination.

Hundreds of Lebanese applauded the army’s tough response in the refugee camp in a sign of the long-standing tensions that remain between some Lebanese and the estimated 350,000 Palestinians who have taken refuge in Lebanon since the creation of Israel in 1948.

At the same time, a group of militants holed up in a building in Tripoli fought off army and police units for hours before finally losing the battle. The building remained partially on fire Sunday night, its staircase and entrance peppered with gunshots and rockets. About a dozen cars on the street were shot up or gutted. TV footage showed the bodies of dead militants amid the debris.

Security officials said some of the militants killed in the building in Tripoli had worn explosive belts but did not have time to detonate them.

The Lebanese Broadcasting Corp. TV station reported that among the dead militants were men from Bangladesh, Yemen and other Arab countries, underlining the group’s reach outside of Lebanon.

“We strongly back the Lebanese army troops and what they are doing,” said Abed Attar, a Tripoli resident who stood watching soldiers firing tank shells into the camp while others cheered.

Abu Salim, a spokesman for Fatah Islam in Nahr el-Bared, said on television that the militants were firing in self-defense.

Security officials said 22 soldiers were killed and 19 were injured along with 14 police officers who were hurt.

They said 10 militants were killed in the raids in Tripoli, and seven more were killed in the refugee camp.

A senior Lebanese security official said a high-ranking member of Fatah Islam, known as Abu Yazan, was among those killed.

Medical officials said 17 Palestinian civilians were wounded, with three women and four children in serious condition.

“We are living in a state of fear. The electricity was cut since 6 a.m., and the shelling is targeting civilians,” said Khaled Najm, a Palestinian who spoke by telephone from inside the camp. “Those fighters came from abroad, and we are paying the price for their actions,” he said.

Fatah Islam is an offshoot of the pro-Syrian Fatah Uprising, which broke from the mainstream Palestinian Fatah movement in the early 1980s and has headquarters in Syria, Lebanese officials say.

It is believed to be led by Shaker Youssef al-Absi, a Palestinian who was sentenced to death in absentia in July 2004 by a Jordanian military court for conspiring in a plot that led to the assassination in Jordan of U.S. diplomat Laurence Foley. Al-Qaida in Iraq and its former leader Abu Musab al-Zarqawi were blamed for the killing.

Some Lebanese security officials consider Fatah Islam a radical Sunni Muslim group with ties to al-Qaida or at least al-Qaida-style militancy and doctrine. Others say they are a front for Syrian military intelligence aimed at destabilizing Lebanon.

Prime Minister Fuad Saniora said the fighting was a “dangerous attempt at hitting Lebanese security.” Mainstream Sunni Muslim leaders, clerics and politicians threw their support behind the army, as did the Palestine Liberation Organization representative in Lebanon.

It also underlined the difficulty authorities have in trying to defeat the country’s armed groups which control pockets across Lebanon.

The army is stretched thin, having to frequently separate Shiite and Sunni Muslims rioters as well as rival Christian factions supporting the opposing political camps in Beirut. It has thousands patrolling southern Lebanon with U.N. peacekeepers and thousands more deployed along Syria’s border to guard against illegal transfer of weapons.