SULTAN YACOUB, Lebanon, Oct 28 (Reuters) – Lebanon’s army loosened its grip on pro-Syrian Palestinian guerrillas on Friday, two days after it had them encircled inside their bases near the Syrian border, witnesses said.The Lebanese government on Thursday played down the significance of the army deployment in the eastern Bekaa Valley, saying it was seeking talks, not an armed conflict with militants over their armed presence outside refugee camps.

Witnesses said troops removed two checkpoints near positions run by the Syrian-backed Fatah Uprising and the Popular Front for the Liberation of Palestine-General Command (PLFP-GC).The army also allowed militants to leave the bases to obtain food and supplies, they added.Lebanese army commandos, supported by tanks, had deployed in force along the Syrian border, in response to the shooting death of a civilian army contractor by suspected Palestinian gunmen.

 A U.N. report, prepared by special envoy Terje Roed-Larsen to the Security Council, said on Wednesday arms were still flowing across the Syrian border to Palestinian groups and others in Syria.

The Lebanese government says Palestinian groups must shut down the military posts they hold outside of the dozen squalid refugee camps, home for around 390,000 refugees.

The issue of armed pro-Syrian Palestinian groups in Lebanon has moved to centre stage since the Security Council passed Resolution 1559 last year, demanding the withdrawal of foreign troops from the country and the disarmament of all militias.