Lebanon's army stepped up its assault on Islamic militants hiding inside a Palestinian refugee settlement on Saturday, launching artillery barrages and sending in armored carriers and special forces.

Witnesses in the Nahr el-Bared camp reported some of the heaviest army shelling since June 1, when the Lebanese army — using tanks and artillery — launched an offensive to drive out the Fatah Islam militants.

Security officials said five soldiers were killed Saturday and 15 wounded, some seriously. The officials spoke on condition of anonymity because they were not allowed to give official statements.

Local and Arab television stations billed it as a major army assault on militants inside the camp, but a senior Fatah Islam commander denied the reports and said fighters were holding their ground against the army.

Click here for FOXNews.com's Mideast center.

"We are on the front lines across from them," Abu Hureira, Fatah Islam's deputy commander, told The Associated Press by telephone from inside the camp.

Abu Hureira, whose real name is Shehab al-Qaddour, dismissed as "rumors" media reports that he and Fatah Islam leader Shaker Youssef al-Absi, were wounded. He said some fighters were "lightly" injured "but it's nothing compared to them," he said, referring to Lebanese army casualties.

He said the militants were still fighting with the same tenacity, claiming that Fatah Islam fighters attacked an army position on the northern edge of the camp Friday and seizing weapons from Lebanese army soldiers.

Tensions in Lebanon have been high since fighting broke out May 20 between the army and Fatah Islam militants in Nahr el-Bared. Fears of spreading chaos have also been sparked by clashes at another Palestinian refugee camp, Ein el-Hilweh in the south, and several bombings in the Beirut area.

In a statement issued Friday, the army said it was "gradually taking control of the terrorists' positions" in Nahr el-Bared.

More than 120 people, including at least 60 Fatah Islam militants, 49 soldiers and 20 civilians, have been reported killed in the fighting — the worst internal violence in Lebanon since the 1975-90 civil war.

Recent civilian casualties are not known because the camp has been closed to journalists and aid workers for days. Though most of Nahr el-Bared's residents have fled, thousands remain trapped inside.

Click here for FOXNews.com's Mideast center.