The fighting, linked to rising sectarian tensions fanned by the Syria conflict, erupted yesterday on the outskirts of the city of Sidon and intensified today, residents and local media said.
The violence between supporters of Sheikh Ahmad al-Assir and the Lebanese army has been among the most serious to hit Lebanon since the start of the conflict in neighbouring Syria.
Despite his marginal role in Lebanese politics, Assir has capitalised on powerful Shiite Hezbollah's increasing notoriety, especially over its involvement in fighting alongside Syrian President Bashar al-Assad's forces against rebels.
A military source in Sidon said the army found in buildings near Assir's headquarters "dozens of bodies of armed men, wearing military fatigues with their weapons lying nearby".
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The army "has arrested dozens of people suspected of loyalty to Assir", the source added.
Ambulances have taken 94 wounded to hospital in the past 24 hours, Red Cross operations chief Georges Kettani told a Lebanese television channel.
An AFP journalist just 20 metres from Assir's mosque in Abra, near Sidon, said troops in military vehicles were deployed there.
Buildings were visibly damaged by two days of clashes, with gaping halls in scorched walls and rubble strewn in the streets.
Shop windows had been smashed, but the goods in several stores appeared untouched, the correspondent said.
Troops helped civilians, among them women and children, to leave buildings in the area, after they had been trapped inside their homes for two days, the correspondent said.
Cars parked nearby were pockmarked with bullet holes.