The shooting on a frontline of the 1975-90 civil war marks some of Lebanon’s worst strife in years.
In scenes reminiscent of the war, local television stations broadcast footage of bullets bouncing off buildings and people running for cover. One of the dead was a woman who was struck by a bullet while in her home, a military source said, adding that all the dead so far were Shiites.
At a nearby school, teachers instructed infant children to lie face down on the ground with their hands on their heads, a Reuters witness said.
The army said in a statement the gunfire had targeted protesters as they passed through the Teyouneh traffic circle.
Hezbollah and Amal movements said groups had fired at protesters from rooftops, aiming at their heads in an attack aimed to drag Lebanon into conflict.
As Prime Minister Najib Mikati called for calm, the army deployed heavily in the area and said it would open fire against any armed person on the road.
The shooting began from the Christian neighborhood of Ain el-Remmaneh before spiraling into an exchange of fire, the military source said.
Hezbollah’s al-Manar TV said two martyrs and a number of wounded had been taken to a hospital in the southern suburbs.
Bursts of gunfire were heard for hours, along with several explosions that appeared to be rocket propelled-grenades fired into the air, witnesses said.