Aug. 17 (Bloomberg) -- Young men with beards, black T-shirts and pistols hanging on their belts emerge from Friday prayers at a mosque in Ein el-Hilweh, a Palestinian refugee camp in centra Lebanon.

They belong to Usbat al-Ansar, an Islamic group that has fought repeated gun battles against the Lebanese Army and Fatah, the dominant faction in the Palestine Liberation Organization. Bullet holes in the mosque's minaret attest to the ferocity of the clashes.

Usbat al-Ansar is just one of about a dozen armed Islamic groups within Lebanon's 12 camps, residents say. Their emergence reflects the bleak living conditions and high unemployment in the politically rudderless areas, which have become a breeding ground for jihadist killers. Operatives from the groups are suspected of involvement in a series of bombings against Lebanese politicians, as well as a June attack that killed six United Nations soldiers.

``That's what's scary, that we have small groups that more or less operate in a bubble,'' says Andrew Exum, a former U.S. Ranger platoon commander in Afghanistan and Iraq who lived in Lebanon for two years and is now a fellow at the Washington Institute for Near East Policy.

About 410,000 Palestinians live in Lebanon, the descendants of refugees who were expelled or fled from what's now northern Israel in the 1948 Arab-Israeli war. Some 270,000 are in the camps, which are self-governing under a 1969 agreement and off- limits to the Lebanese army.

Forced Out

The PLO exerted some control in the camps until Israel and Syria forced it out of Lebanon in the early 1980s, says Ruairi Patterson, Middle East analyst at London-based consulting firm Control Risks.

After the 1993 Oslo Accords provided for Palestinian self-rule in the West Bank and Gaza Strip, the PLO further turned its back on the diaspora. Then in 2005, Syria's 30-year occupation ended, emphasizing the split between Lebanon's pro-Syrian and pro-Western political factions.

``These groups flourish when there is a lack of control, and that's what's happened in the camps since Syrian intelligence withdrew,'' Patterson says.

Islamist militants have lived in the camps since a handful of residents returned in the late 1980s from fighting the Soviets in Afghanistan.

Increasing Anarchy

Their numbers have grown in the past five years because of the increasing anarchy, says Amer el-Sammak, a 52-year-old doctor who runs a clinic in the camp.

``When things are bad, people look to strong things to help them,'' el-Sammak says. ``They look to God and guns.''

Guns are everywhere in Ein el-Hilweh. Ten yards beyond the Lebanese army checkpoint at the entrance is a roadblock manned by fighters from Fatah bearing Russian Kalashnikov assault rifles. Down the street is the base of the Syrian-backed Popular Front, where armed men sit drinking tea beneath posters of the Syrian president. Half a dozen armed men guard the entrance to the home of Munir al-Maqdah, Fatah's military commander in Ein el-Hilweh.

Further north, the Nahr el-Bared camp has been totally destroyed by fighting that began in May when Fatah al-Islam, an Usbat rival that isn't affiliated with Fatah, tried to take over the area. The Lebanese army invaded after an attack that killed 27 of its soldiers, its first entry into a camp since the 1969 agreement.

Hidden in Rubble

On a recent afternoon, Lebanese artillery pounded Fatah al-Islam positions every three minutes, with small-arms fire following each barrage. Half-track vehicles carried soldiers to the front lines, now hidden in rubble. More than 200 people have died, and Nahr el-Bared's 31,300 residents have fled.

Since this outbreak, Usbat and Fatah have put their differences aside to work together at Ein el-Hilweh to keep a lid on violence. Fatah locked up three militants from a third group, Jund al-Sham, after they fired a grenade at a Lebanese army post in early June, al-Maqdah says. He's also telling small

Islamic factions to turn in their guns.

More than 100 guns have been handed over, and al-Maqdah says he's written to Palestinian President Mahmoud Abbas seeking money for a buyback.

Abu Omar, a 37-year-old fighter, says he'll never turn in the two Glock pistols on his belt. He claims they came from Iraqi officers killed during a six-month stint in Iraq. Last month, a bomb badly burned his left arm and killed his brother-in-law and a nephew. He says he suspects a rival group.

Al-Qaeda Goals

While some of the groups in the camps have been linked to al-Qaeda, they deny any connection. They do say they share its goals of reinstating the Caliphate, or unifying the Islamic world. Such views are barely present among Palestinians elsewhere.

``Fatah never wanted any links to al-Qaeda because they were focused on recovering Palestine and weren't interested in wider Islamic issues,'' says Alain Rodier, a former French intelligence officer and now a researcher at the French Center for Intelligence Research.

This is one of the reasons why Fatah has lost the support of young men like Omar. ``By making the Palestinian cause just a national cause and not an Islamic one, they belittled it,'' he said.

Critics also say Fatah hasn't improved living standards in the camps. About 70 percent of Ein el-Hilweh's 46,000 inhabitants are unemployed, living off charity and crammed into one square kilometer of rutted trash-strewn streets, narrow alleys, barren shops and unfinished bare-concrete buildings.

Islamic Code

"Our youth join us because they can see what we can achieve," says Abu Sharif, a religious leader for Usbat al- Ansar. "We do the right thing by the Islamic code."

Fatah's al-Maqdah says jobs would keep young men from joining the ranks of the Islamists. To avoid upsetting its delicate balance of Christians, Sunni, Shia and Druze, Lebanon has limited Palestinians' access to employment and bars them from owning property and using social services.

Lebanon has made some accommodations. In early 2006, it opened up about 50 types of manual and semi-technical jobs. Khalil Makkawi, responsible for Palestinian affairs in the Lebanese government, says when Lebanon's political standoff is resolved, he'll present bills allowing Palestinians to work in professions such as medicine and engineering.

"The question of the Palestinians has been neglected for 30 years because of all the crises we've had," Makkawi says. "The Syrians were here for 30 years." Former Palestinian leader Yasser Arafat" did nothing to improve the conditions in the camps. There was negligence, and we are paying the price."