Seven people have been injured following a large explosion in a car park in a Sunni Muslim area of Beirut.
Earlier, nine Palestinian civilians were killed as Lebanese troops pounded Islamist militiamen in a Palestinian refugee camp.
It was the second day of the bloodiest internal fighting since the civil war that has killed at least 79 people and raised fears about Lebanon's fragile security.
Soldiers in tanks, who are battling militants from the shadowy Fatah al-Islam group, besieged the Nahr al-Bared camp in northern Lebanon.
Huge plumes of thick black smoke billowed into the sky over the camp, which has been turned into a war zone by ferocious gun battles between soldiers and Fatah al-Islam, a group accused of links to Al-Qaeda and Syrian intelligence services.
Lebanese leaders have vowed to take 'all necessary measures' to restore order after fighting in the camp and the nearby city of Tripoli, while the international community appealed for calm.
As warships patrolled nearby coastal waters, troops were locked in heavy exchanges of artillery and machinegun fire and a military spokesman said the army had extended its control to all camp entrances.
But Fatah al-Islam threatened to extend attacks beyond Tripoli if the army continues to pound its positions.
Earlier in a statement, the Minister for Foreign Affairs, Dermot Ahern, said he was deeply concerned at the escalating violence and the serious loss of life in northern Lebanon.
The UN has voiced concern about an unfolding human crisis in the refugee camp.
The German presidency of the European Union condemned the bloodshed and called for the disarmament of Islamic militia fighters.
The US State Department has said the Lebanese security forces are justified in their attacks on the militants.
State Department spokesman Sean McCormack said the militants were committed to violence and the use of terror.
He said the Lebanese security forces were rightfully acting to enforce law and order in Lebanon.
