Five Spanish U.N. peacekeepers were killed Sunday and three others wounded in an explosion targeting U.N. troops in southern Lebanon, a senior Lebanese military official said.

The U.N. Interim Force in Lebanon, known as UNIFIL, confirmed the explosion and said there were casualties without giving a specific number or confirming if any peacekeepers were killed. UNIFIL said it suspected that the blast was caused by an explosive device, according to a statement.

In Madrid, the Spanish Defense Ministry confirmed at least four Spanish peacekeepers were killed and three injured. UNIFIL medical teams were working in the area, and they had no additional information, a ministry spokesman said.

The senior Lebanese official in Beirut said a mine may have caused the explosion. But another security official based in southern Lebanon said the explosion was caused by a bomb that was placed on the side of the main road between the towns of Marjayoun and Khiam, about six kilometers (four miles) north of the Israeli border town of Metulla.

All the officials spoke on condition of anonymity because they were not authorized to speak to the media.

White smoke billowed from the armored personnel carrier, which was thrown by the force of the explosion to the side of the road. Fire engines rushed to the area to put out the flames.

Witnesses reported hearing another explosion shortly afterward but it was believed to be either ammunition or the vehicle's fuel tank, which blew up, perhaps explaining the high casualty toll.

Sunday's deadly explosion was the first time that UNIFIL has come under attack since it was reinforced last summer after the war between Hezbollah guerrillas and Israeli forces in Lebanon. The 13,000-member U.N. force from 30 countries along with 15,000 Lebanese troops patrols a zone along Lebanese-Israeli border.

In a statement on its television station Al-Manar, Hezbollah denounced the attack, calling it a "suspicious act." The militant has had good relations with UNIFIL since the troops were first deployed in Lebanon in 1978.

Lebanese President Emile Lahoud also "strongly denounced" the incident that he said aims at destabilizing Lebanon.

There have been warnings that the peacekeepers could come under terror attacks, particularly from Al Qaeda and its sympathizers. Media reports earlier this month said interrogations by Lebanese authorities with captured militants revealed plots to attack the force.

Those warnings became more serious after Fatah Islam, Al Qaeda-inspired militant group, began fighting Lebanese troops in a northern Lebanon Palestinian refugee camp five weeks ago. The militants have threatened to take their battle outside northern Lebanon and other militant groups have issued Internet statements supporting Fatah Islam.

Earlier Sunday, the state-run National News Agency said the Spanish battalion had organized a celebration in its headquarters in Ibl el-Saqi near Marjayoun to mark the anniversary of St. John the Baptist — the patron saint of King Juan Carlos. Celebration was attended by UNIFIL commander, Gen. Claudio Graziano of Italy.

Southern Lebanon has been largely quiet after the summer war that killed more than 1,200 people, most of them in Lebanon. Rockets were fired on Israel a week ago, causing damage but no casualties in an attack that was blamed on radical Palestinians or sympathizers with Fatah Islam.

The attack on the peacekeepers comes amid a series of events that have caused instability across the country.

Along with the northern fighting and the southern rocket attack, about a half dozen bombs have exploded in residential neighborhoods in the Beirut area since the Fatah Islam-army fighting erupted May 20. One of the Beirut bombs killed a prominent anti-Syrian member of the country's Parliament.

Earlier, Lebanese troops raided an apartment complex suspected of housing Islamic militants in the northern port city of Tripoli early Sunday, sparking a gunbattle that left 10 people dead, including a soldier and six gunmen, security officials said.

The fighting marked a new escalation in the army's battle with Islamic militants, as the fighting shifted from the bomb-ravaged, besieged Palestinian refugee camp of Nahr el-Bared on Tripoli's outskirts back to the city itself, where violence first erupted May 20.

A soldier, a policeman and two family members were killed in Sunday's confrontation, the security officials said, speaking on condition of anonymity because they were not authorized to speak to the media. They said six of the gunmen were also killed — three Saudis, an ethnic Chechen and two Lebanese who also held European citizenships.

According to the officials, at least two of the militants had been living there for some time. Others took refuge there with them on Saturday.

The slain policeman lived in the besieged, two-building complex. The gunmen first tried to take his family hostage, then killed him, his daughter and his uncle, the security officials said.

Fayez Sayyed, a 43-year-old grocery store owner who lived in a fourth-floor apartment, said his wife briefly encountered the gunmen. "Two bearded men knocked on the door and asked her to open, but she didn't," Sayyed said.

Before Sunday's gunbattle, Tripoli had not seen fighting since the first week of the conflict with Fatah Islam militants at Nahr el-Bared, Lebanon's worst internal violence since the 1975-90 civil war.

Lebanese Defense Minister Elias Murr declared victory over the militants Thursday, and the army said the next day it had overrun Fatah Islam's main positions inside the camp.

But sporadic fighting has continued, and two top Fatah Islam leaders, Shaker al-Absi and his deputy, Abu Hureira, are still at large, along with an unknown number of fighters. They are believed to be holed up among the several thousand Palestinian civilians still inside sections of Nahr el-Bared not under army control.

Complete coverage is available in FOXNews.com's Mideast Center.