LABWEH, Lebanon -- Thousands of Lebanese civilians and Syrian refugees crammed into cars and pickup trucks fled a town in eastern Lebanon Monday as troops battled al-Qaida-linked militants from neighbouring Syria who overran the border region in the most serious spillover into Lebanon of the three-year conflict next door.

The fierce fighting in Arsal, now in its third day, has killed 17 Lebanese soldiers and compounded fears that tiny Lebanon is fast becoming a new front in its neighbour's conflict. The government rushed reinforcements to the scene, including dozens of armoured personal carriers, tanks and elite troops, suggesting fighting was about to worsen.

The civilian exodus came in the early morning hours during a relative lull in fighting and just a few hours later the bombardment around the town of Arsal had reached an intensity of three shells every minute.

"We call on the Lebanese army to strike with an iron first," said Mohammed Hojeiri, who fled Arsal with his family packed in an SUV Monday. "Those gunmen are terrorizing civilians."

The clashes in Arsal, a predominantly Sunni town of 40,000 whose population has almost tripled because of the presence of Syrian refugees and rebels, could worsen already bubbling sectarian tensions in Lebanon. The town is wedged between Syrian government-controlled territory and Lebanese Shiite villages sympathetic to Lebanon's premier Shiite militia, Hezbollah.

The Syrian government, which is battling a largely Sunni insurgency, has the support of Hezbollah.

Though the army has only said it is fighting "armed terrorists," without naming them, the government has linked the conflict regional developments, where an al-Qaida breakaway group known as the Islamic State has declared a self-styled caliphate in border areas straddling Iraq and Syria.

"There will be no political compromises with extremist groups who seek to destroy Arab societies under strange and obscure religious headlines, and who now seek to transfer their sick practices to Lebanon," Prime Minister Tammam Salam said following a Cabinet meeting Monday.

While some hard line Sunni politicians in Lebanon have described the army's attacks against the militants as an Iranian-Syrian conspiracy against Sunni Islam, former Prime Minister Saad Hariri, a Sunni leader with a large following in the country, said the Lebanese army is "a red line" and accused al-Qaida linked groups in Syria, including the Nusra Front and the Islamic State group, of taking Arsal hostage.

A senior Lebanese security official said 17 soldiers have been killed in three days of fighting, including two lieutenant colonels. He spoke on condition of anonymity in line with regulations. A Lebanese army statement said 86 soldiers were wounded and 22 were missing.

Lebanon's state-run news agency said the rebels were looting homes and shops in Arsal and a resident on the outskirts told The Associated Press that the militants were committing "atrocities" and shooting at people attempting to flee.

"The rebels feel protected by the civilians there," he said, confirming there was widespread looting with rebels taking over civilian homes to use as military posts.

Syrian refugees who had earlier fled the war at home for Arsal's safety found themselves on the road again. Fatmeh Meshref from the Syrian central city of Homs, said she and her husband and five children were terrified.

"Our children were screaming and we had no place to hide," she said.

The Syrian incursion and capture of Arsal came after the Lebanese army said its troops had detained Imad Ahmad Jomaa, who identified himself as a member of the al-Qaida-linked Nusra Front -- one of the most powerful rebel groups fighting against Syrian President Bashar Assad's troops.

Lebanese army chief Gen. Jean Kahwaji said on Sunday that the Syrian fighters in Arsal belonged to extremist Sunni groups, without naming them. He said the fighting was "more serious than what some people imagine."

In Syria, the extremist Islamic State group butchered a family of seven belonging to a Shiite Muslim sect in their homes, reported the Britain-based Syrian Observatory for Human Rights. The Observatory said a family of seven people, including two children, were shot and stabbed in a rural village near the central Syrian town of Salamiyah.

State media also reported the attack. The Islamic State fighters likely targeted the family because they belonged to the Ismaili sect, a branch of Shiite Islam. Many of the extremist Sunni groups fighting in Syria and now Iraq view all other sects of Islam outside their own strict interpretation as heretical.