The Bush administration on Monday placed on its terrorism blacklist a Lebanese Islamist group blamed for major fighting at a Palestinian refugee camp.

The State Department announced that Secretary of State Condoleezza Rice has designated the Al Qaeda-inspired Fatah al-Islam, which is suspected of having links with Syria, as a "specially designated global terrorist" group under an executive order aimed at cutting off finances to extremist organizations.

The step, which had been expected, cuts off Fatah al-Islam from the U.S. financial system and freezes any assets it or its members may have in the United States or under U.S. jurisdiction, the department said in a statement.

It comes as Washington steps up efforts to free Lebanon from Syrian influence and amid serious clashes between Lebanese troops and Fatah Islam militants at the Nahr el-Bared camp that have killed at least 136 people since they erupted in May.

"The United States condemns the recent violence perpetrated by Fatah al-Islam in the Nahr al-Bared Palestinian refugee camp and supports the government of Lebanon and its security forces in their efforts to promote stability and rule of law throughout the country," the statement said. "This terrorist group threatens the safety and security of the Lebanese people and the region."

The fighting is the worst internal violence in Lebanon since its 1975-90 civil war and has dragged on despite the Lebanese army besieging the camp to uproot the group. The army has refused to halt its offensive until the militants completely surrender, but the gunmen have vowed to fight to the death.

Last week, Fatah Islam said in a statement posted to a Web site that its No. 2 commander, Abu Hureira, had been killed in the clashes and celebrated the "martyrdom of a noble a noble brother," vowing to avenge his death.

The whereabouts Fatah Islam leader, Shaker Youssef Absi, are unknown.

Absi has been sentenced to death in absentia in Jordan for his involvement in the 2002 murder of U.S. diplomat Laurence Foley in Amman, the State Department noted.