Hezbollah gunmen melted off the streets of Beirut Saturday, heeding an army call to pull the fighters out after the Shiite militants demonstrated their military might in a power struggle with the U.S.-backed government.

Prime Minister Fuad Saniora, in his first public statement since sectarian clashes erupted on Wednesday, said Lebanon can no longer tolerate Hezbollah having weapons. He called on the army to restore law and order and remove gunmen from the streets.

Despite his tough talk, Saniora made a key concession to the Hezbollah-led opposition that would effectively shelve the two government decisions that sparked the fighting.

Muslim West Beirut was mostly calm a day after Hezbollah and its allies seized control of neighborhoods from Sunnis loyal to the government. Most Hezbollah gunmen had pulled out, leaving small bands of their Shiite Amal allies to patrol the streets.

While tensions in the capital appeared to be defusing, violence spread and intensified in other parts of the country.

At least 12 people were killed and 20 wounded when pro- and anti-government groups fought in a remote region of northern Lebanon, Lebanese security and hospital officials said. It was the heaviest toll for a single clash since fighting began.

At least 37 people have been killed in four days of clashes _ the worst sectarian violence since Lebanon's 1975-1990 civil war.

The violence grew out of a political standoff between the opposition, which pulled out of the Cabinet 17 months ago demanding veto power over government decisions. The deadlock has prevented parliament from electing a president, leaving the country without a head of state since November.

The political standoff turned into clashes after the government confronted Hezbollah earlier this week. It said it would sack the chief of airport security for alleged ties to Hezbollah and declared the group's private telephone network illegal and a threat to state security.

Hezbollah leader Hassan Nasrallah said Thursday the decisions amounted to a declaration of war and he demanded they be revoked. His Shiite forces then overran large swaths of West Beirut.

The rout was a blow for Washington, which has long considered Hezbollah a terrorist group and condemns its ties to Syria and Iran. The Bush administration has been a strong supporter of Saniora's government and its army for the last three years.

The show of force added to jitters in the Middle East and the West over Iran's growing influence and its intentions in the region.

The Bush administration said Saturday that it was pleased to see Lebanese armed forces under the authority of Saniora working to restore order on the streets.

"Our concerns regarding Hezbollah are unchanged," said Gordon Johndroe, a spokesman for the National Security Council. "We are seeing some lessening of violence in the streets."

Saniora accused Hezbollah of staging a coup, besieging the capital and "poisoning" the dream of democracy in Lebanon.

"The government did not declare war against Hezbollah. Hezbollah declared the war and is waging it with the aim of changing the local, regional and international balance of powers," he said.

After Saniora's speech, the army called for gunmen to withdraw from the streets of Beirut and reopen blocked roads.

Seeking to stop the country's slide toward all-out chaos and sectarian strife, the military ordered army units "to continue to take measures on the ground to establish security and spread state authority and arrest the violators."

Saniora said he would leave it up to the army to resolve the confrontation that sparked the clashes over the airport security chief and the Hezbollah telephone network.

The army offered Hezbollah a compromise. It said the airport security chief would not be sacked and recommended to the government that it reverse the decision on the phone network.

But the compromise did not fully satisfy the opposition's demands that the government officially revoke the two decisions.

The army has largely stayed out of the fighting, fearing its forces could break apart on sectarian lines as they did during the civil war. But in the past 24 hours they deployed heavily in neighborhoods of West Beirut seized earlier by the Shiites, stationing armored personnel carriers and jeeps on street corners and putting up more checkpoints.

In some areas they protected besieged leaders of the pro-government factions, Sunni parliament majority leader Saad Hariri and his ally, Druse leader Walid Jumblatt.

The army command is respected by Hezbollah and an opposition statement said its forces will withdraw all their gunmen from Beirut in compliance with the army request. Continued...