Lebanon's defense minister issued an ultimatum Wednesday to Islamic militants barricaded in this Palestinian refugee camp to surrender or face a military onslaught.

Fighters from the Al Qaeda-inspired Fatah Islam militant group vowed not to give up and to fight any Lebanese assault.

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 the thousands of civilians who remain inside.

It could also have grave repercussions elsewhere across troubled Lebanon, sparking unrest among the country's estimated 400,000 Palestinian refugees. Already some of the other refugee camps in Lebanon, which are rife with armed groups, are seething with anger over the fighting.

But the military appeared determined to uproot Fatah Islam after three days of heavy bombardment of the camp, sparked by an attack by the militants on Lebanese troops Sunday following a raid on its fighters in the nearby northern city of Tripoli.

"Preparations are seriously under way to end the matter," Defense Minister Elias Murr said 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 Fatah Islam said they were ready to fight.

"We are not going to let those pigs defeat us," said one of a half-dozen fighters standing outside the group's office inside the camp. The fighter, who identified himself with the pseudonym Abu Jaafar, wore a belt hung with grenades.

Another militant who said he was a deputy leader of the group said the fighters were willing to agree to a cease-fire if the military allowed them to remain in the camp.

But the militant, who gave his pseudonym as Abu Hureira, warned the troops would "face a massacre" if they attempt to enter Nahr el-Bared. It is unclear how many Fatah Islam fighters are in the camp, but Abu Hureira said they number more than 500.

Around half of Nahr el-Bared's 31,000 residents have fled since a halt in the fighting Tuesday night, some clutching babies and plastic bags full of clothes. They traveled on foot and in cars past burned-out shops on streets strewn with broken glass, garbage and dead rats.

But thousands remain behind, either too ill to travel or unwilling to abandon their homes, and are now in danger of being caught in the crossfire.

Ahmed Kanaan, 92, was staying in the camp with his 37-year-old daughter. "We are treated like dogs," said the old man, who fled his home in what is now the Israeli city of Nazareth in 1948 after the first Arab-Israeli war. "They step on us and continue walking."

"I would have been better off had Palestine died altogether" in 1948, he said.

John Holmes, the U.N. undersecretary-general for humanitarian affairs, appealed for immediate access to the refugee camp to deliver relief supplies and evacuate the wounded. A U.N. relief convoy came under fire Tuesday as it attempted to deliver food and water to residents.

He urged the Lebanese government "to exercise maximum restraint" inside the camp.

Occasional gunshots broke the quiet at the camp Tuesday night, witnesses said, but there was no fighting during the day Wednesday. In the afternoon, the army brought seven more armored carriers to its positions ringing the camp, although the troops did not move beyond the front line.

Army officials in Beirut refused to comment on the reinforcements.

Murr said 30 Lebanese soldiers were killed in the three days of fighting, along with as many as 60 militants, including fighters from Lebanon, Jordan, Syria and Saudi Arabia. But a top Fatah Islam leader said only 10 of his men were killed.

U.N. relief officials said the bodies of at least 20 civilians were retrieved from inside the camp during the lull in fighting.

The U.N. Security Council condemned the attacks by Fatah Islam "in the strongest possible terms" Wednesday, saying they constitute an attempt to undermine the country's stability, security and sovereignty.

Secretary of State Condoleezza Rice also signaled her support for the Lebanese government, saying "we are quite certain that with the resolve that they're showing, they're going to be able to handle the situation."

"What is going on in Lebanon is a reminder that these young democracies around the world are under threat from extremist forces that hate the fact that they're democracies," she said in a news conference with Australia's foreign minister in Simi Valley, Calif.

The Lebanese government appeared to be preparing in case the showdown sparks violence elsewhere in the country. In a sign of the danger, a bomb exploded Wednesday night in a mountain resort overlooking Beirut, a 90-minute drive south of Nahr el-Bared. The blast, which injured five people, was the third in the Beirut area since Sunday.

Fatah Islam denied responsibility for the first two bombings, which killed a woman and injured a dozen people. But many Lebanese fear more blasts if the siege continues.

Also Wednesday, Lebanese troops killed an Islamic militant as he prepared to throw a grenade at a unit of security forces raiding an apartment in Tripoli, police said. Lebanon's state-run National News Agency said two passers-by were wounded in the exchange.

Lebanon has 12 Palestinian refugee camps, which are all plagued by poverty and overcrowding. The camps are home to many armed factions, as well as Islamic militant groups which have sent fighters to Iraq to join the fight against U.S.-led coalition troops.

The Lebanese military stays out of the camps under a 1969 agreement that allows the Palestinians to run them.

Major Palestinian factions — including the mainstream Fatah and militant Hamas and Islamic Jihad groups — have distanced themselves from the militants in Nahr el-Bared. Unlike them, Fatah Islam adheres to Al Qaeda ideology and appears to have a large number of non-Palestinian fighters.

But the Palestinian factions appeared divided over whether to send their fighters to help the Lebanese military against Fatah Islam.

Sultan Abuleinein, the Fatah chief in Lebanon, hinted his group might intervene, calling for the liberation of Nahr el-Bared from "the plague" of the militants in an interview with al-Arabiya television.

But Abbas Zaki, a PLO representative in Lebanon, denied that the major Palestinian factions supported a Lebanese storming of the camp or that they were willing to join. "Beware of being deceived that there is a decision by Fatah to fight," he told Al-Jazeera television.

A group claiming to be made up of Palestinians from Lebanon's largest refugee camp — Ein el-Hilweh — has posted a statement on an Islamic militant Web site warning that it would form "jihadi groups" — holy warriors — to fight alongside Fatah Islam.