Lebanon's defence minister has told members of Fatah Islam to either surrender or face a full military onslaught.
"Preparations are seriously underway to end the matter," Defence Minister Elias Murr said Wednesday in an interview with Al-Arabiya television.
"The army will not negotiate with a group of terrorists and criminals. Their fate is arrest, and if they resist the army, death."
Members of the al Qaeda-inspired group holed up in a Palestinian refugee camp vowed Wednesday to fight any Lebanese assault.
"We are not going to let those pigs defeat us," said a fighter, who identified himself with the pseudonym Abu Jaafar.
Another militant, who gave the Aub Hureira, said the fighters would agree to a ceasefire if the military allowed them to remain in the camp.
Palestinian refugees continue to flee the Nahr el-Bared camp. About half the inhabitants -- roughly 15,000 -- left late Tuesday night when it became apparent the truce between Lebanese troops and Islamic militant members of Fatah Islam would not be respected.
Another 1,000 escaped the camp in northern Lebanon on Wednesday morning, The Associated Press reports.
The camp is a densely populated area with narrow streets sitting right on the Mediterranean coast, making for tough urban fighting conditions and great danger for the thousands of remaining civilians.
Observers worry this situation could spark unrest elsewhere among Lebanon's estimated 400,000 Palestinian refugees. Many of those 12 camps harbour armed groups angry over the fighting.
Under a 1969 agreement, the Lebanese military is supposed to stay out of the camps and allow the Palestinians to run them.
Lebanon's military has bombarded the Nahr el-Bared camp for three days, following a clash after a raid on the militants in the nearby city of Tripoli on Sunday.
There was only occasional shooting Tuesday night and none during the day Wednesday. But in the afternoon, the Lebanese army moved in seven more armoured personnel carriers to ring the camp.
Murr said 30 Lebanese soldiers have died so far and claimed up to 60 militants have been killed. Those have come from Jordan, Syria and Saudi Arabia as well as Lebanon, he said.
However, one militant leader claim only 10 of his fighters have been killed so far.
A United Nations security official said Wednesday the bodies of 20 civilians -- men, women and children -- have been retrieved from the camp. But the total number of civilian casualties remained unknown.
The United Nations Security Council has condemned Fatah Islam's attacks "in the strongest possible terms." The statement said the attacks undermine Lebanon's stability, security and sovereignty.
Major Palestinian groups -- the mainstream Fatah and militant Hamas and Islamic Jihad -- have distanced themselves from Fatah Islam's actions.
With files from The Associated Press
