Two people were killed when gunmen briefly opened fire in Lebanon's largest Palestinian refugee camp, breaching a tense ceasefire, Palestinian sources said on Thursday.

A source from the Fatah Palestinian faction said a Fatah official and a civilian had been killed in fire by "unidentified gunmen" overnight in Ain al-Hilweh in southern Lebanon.

The breach threatened a ceasefire that ended several days of clashes between Fatah and an Islamist group in the camp.

Palestinian officials said the ceasefire remained in place despite the breach and that high-level contacts were made during the night to ensure it would be respected.

Ain al-Hilweh is an impoverished, overcrowded camp near the coastal city of Sidon, home to some 61,000 Palestinians, including 6,000 who fled the war in Syria.

By long-standing convention, Lebanon's army does not enter Palestinian refugee camps, meaning many have turned into lawless areas.