Dubai Lebanon inched towards civil war last night as violent clashes erupted shortly after Hezbollah leader Hassan Nasrallah warned a Lebanese government crackdown on the group was tantamount to a "declaration of war".

For the first time in its history, Hezbollah was ready to use its weapons internally to protect "our existence and dignity," Nasrallah said at a rare press conference via video link on Thursday.

A security official told media that clashes raged in several mixed neighbourhoods in Beirut, with masked men using rocket-propelled grenades, assault rifles and machine guns.

The violence began Wednesday when a general strike over mounting prices and wage demands quickly turned violent. "The [government] decisions are tantamount to a declaration of war and the start of a war ... on behalf of the United States and Israel," Nasrallah said.

Hariri's compromise plan

The Western-backed Lebanese government on Tuesday launched a probe into a Hezbollah communication network and removed the head of airport security over his alleged links to the group.

Nasrallah gave the government a clear ultimatum; either to rescind its measures or face an escalation in street protests. "We have the right to confront he who starts a war with us by defending our rights and our weapons." Speaking hours after Nasrallah's speech, Lebanese parliamentary majority leader Sa'ad Hariri urged the Hezbollah chief to lift his "siege" of Beirut and work with him to end the fighting. In a televised appearance Harri called on both sides to "pull their fighters of the street ... to save Lebanon from hell." He also proposed a compromise on government decisions.

The Lebanese army meanwhile said the situation was getting out of hand. "If this situation continues, everyone will lose and this will affect the unity of the military," the army command warned.

Saudi Arabia, a key supporter of the government, also warned the opposition. "The kingdom urges the groups behind the escalation ... to realise that leading Lebanon towards turmoil will not bring victory to any party except extremist forces," the state news agency quoted an official as saying.

US: Sanctions should be considered

Washington/United Nations: The UN Security Council should consider "additional steps" including sanctions if Syria and Hezbollah do not move to resolve the current crisis in Lebanon, Washington's UN Ambassador saidon Thusady. The UN meanwhile warned the crisis could have serious regional repercussions.

US Ambassador Zalmay Khalilzad said Hezbollah should "operate within the law," stop challenging "the legitimate" government of Lebanon and support election of a president. He said Syria should delineate its border with Lebanon and establish diplomatic relations with its neighbour.

"In the absence of those kinds of developments, the council will have to confront these challenges and deal with the problem by taking appropriate steps," he told reporters. Such steps could be a new UN Security Council resolutions or sanctions, he said.

The White House also warned Hezbollah yesterday to stop its disruptive activities in Lebanon.

Earlier, UN Secretary-General Ban Ki-moon urged the opposition to end blockades of roads and the airport, according to his Lebanon envoy, who warned the crisis was the worst since the civil war.

Challenge to government

"We remain gravely concerned about the potential for further escalation of the situation," UN envoy Terje Roed-Larsen told the Security Council. "The secretary-general urges all parties to cease immediately these riots and to reopen all roads in the country."

Roed-Larsen said the UN chief stood firmly behind the "legitimate Lebanese government," and said the presence of Lebanese and foreign militias was a major challenge to the government.

- Reuters