A general view of the concrete wall surrounding the Ein el-Hilweh Palestinian refugee camp near the southern port city of Sidon, Lebanon, on May 5, 2017. AP
The clashes pitted members of Palestinian president Mahmud Abbas's Fatah movement against Islamist groups in the camp, located near the coastal city of Sidon, said senior Fatah official Mounir Makdah.
"One person was killed and seven wounded," he told AFP, adding that "all Palestinian forces are working to put an end" to the violence.
Clashes between rival groups are common in Ain al-Helweh, which is home to more than 54,000 registered Palestinian refugees who have been joined in recent years by thousands of Palestinians fleeing the conflict in Syria.
An AFP correspondent said the shooting had mostly subsided around dawn but that sporadic gunfire could still be heard later in the morning.
The situation remained tense and armed men deployed to the streets of the camp, while schools run by the United Nations agency for Palestinian refugees, UNRWA, were closed.
By long-standing convention, the Lebanese army does not enter Palestinian refugee camps in Lebanon, leaving the factions themselves to handle security.
That has created lawless areas in many camps, and Ain al-Helweh has gained notoriety as a refuge for extremists and fugitives.
More than 450,000 Palestinians are registered with UNRWA in Lebanon.
Most live in one of 12 official refugee camps, often in squalid conditions, and face a variety of legal restrictions, including on their employment.