Lebanon's U.S.-backed government reversed on Wednesday measures against Iran ally Hezbollah that set off the worst violence since the country's 1975-1990 war.

The decision was a major victory for Hezbollah and the latest sign that the Shiite militant group, by resorting to force, appears to have gained the upper hand in a power struggle with the government. Seconds after the announcement, celebratory gunfire erupted south of Beirut, a Hezbollah stronghold.

Clashes between government supporters and opponents broke out last week after the Cabinet confronted Hezbollah with decisions to sack the airport security chief for alleged ties to the group and to declare the militants' private telephone network illegal.

Hezbollah leader Hassan Nasrallah said that amounted to a declaration of war and sent his armed fighters into the streets for the first time since the civil war ended, demanding the government revoke the decisions.

Fierce street battles, many of them along sectarian lines, erupted and Hezbollah and its Shiite allies seized much of Muslim west Beirut by force. At least 54 people were killed.

Information Minister Ghazi Aridi said the government made a "courageous" decision to revoke the measures "in view of the higher national interest."

His announcement came at the end of a five-hour Cabinet meeting, the length of which reflected the pressure on Prime Minister Fuad Saniora's government to cave in to the Hezbollah demand.
Aridi said the government hoped the decision would "pave the way for a new stage" in which the country would "manage to put sectarian strife behind us and concentrate on Lebanese national unity."

He said the government hoped for a settlement in the crisis with the Hezbollah-led opposition that has paralyzed Lebanon for 18 months.

The opposition quit the Cabinet in November 2007 demanding more power and a veto over all government decisions. The deadlock has prevented parliament from electing a new president, leaving the country without a head of state for six months.

There was no immediate response from the Hezbollah to the government's decision.
No fighting was reported in Lebanon Wednesday — a cease-fire largely halted the clashes on Monday. But tensions lingered after Hezbollah's display of its military might last week.

The Bush administration said Wednesday it wants to speed up U.S. aid for Lebanon's Army because of the recent sectarian fighting.

Acting chief of U.S. Central Command, Army Lt. Gen. Martin Dempsey, met Wednesday with Lebanon's army commander and defense minister in a visit the U.S. embassy in Beirut said "focused on the continued assistance" to the Lebanese military.

In Washington, State Department spokesman Tom Casey said the administration plans to ask Congress to quickly approve military aid for Lebanon that was already in the works. He would not say how much the administration is seeking or what the money would buy. But previous military grants have gone to buy ammunition, armor and the like.

U.S. Bush has said he wants to beef up the Lebanese Army, but he also expressed disappointment in the military's performance during the recent violence. The army did not intervene as Hezbollah, considered a terrorist group by the U.S., overran Beirut neighborhoods.

The Lebanese military feared that if it got involved in the fighting, it could split along sectarian lines as happened in the civil war.

The Cabinet's reversal came after a day of mediation by a high-powered Arab League delegation in Beirut.

The delegation, with senior ministers of nine countries, met with Parliament Speaker Nabih Berri, who is aligned with the opposition, and the prime minister.

'Sunni Arab heavyweights Egypt and Saudi Arabia, who back the Saniora government, were not represented in the delegation. Syria, which supports Hezbollah, was also not included. The three countries were considered too close to the opposing factions.

Lebanon's strife has touched off a wider regional standoff between Saudi Arabia and Iran, the world's largest Shiite nation.

Saudi Foreign Minister Saud al-Faisal warned Iran its support for Hezbollah's "coup" in Beirut will damage Tehran's relations with Muslim and Arab countries, while Iranian President Mahmoud Ahmadinejad retorted that Iran was the only country that does not interfere in Lebanon's internal affairs.

Syria, which has been accused by U.S., Saudi and the anti-Syrian camp in Lebanon of obstructing the election of a president, said it supported Arab efforts to resolve the crisis. But it accused the U.S. of pushing for the government decisions against Hezbollah, adding the crisis would not have happened without "incitement" and funding from abroad.