San Francisco Mayor Ed Lee on Wednesday demanded "dramatic changes" at the mushrooming Occupy SF encampment on the Embarcadero, a compound of more than 200 tents and larger communal structures that he called a public health nuisance.

Lee stopped short of saying he would order police to shut down the around-the-clock demonstration at Justin Herman Plaza across the street from the Ferry Building, but all indications are that time is running out for the encampment.

City officials reissued a set of 11 conditions they expected to be met, including that no more than 100 small tents can be erected at specific spots in the public plaza and that no alcoholic beverages or illegal drugs can be distributed or consumed at the site.

"We'll see what happens," said Lee, who met for more than an hour behind closed doors at City Hall on Wednesday with representatives of the Occupy SF encampment in an attempt to avoid a confrontational showdown, like the one that led to rioting two weeks ago after law enforcement officers dismantled the Occupy Oakland encampment at Frank Ogawa Plaza in front of City Hall.

The Occupy encampments have sprung up across the country to highlight economic inequality and what participants view as unshackled corporate greed. They also have proven to be a challenge for mayors who, like Lee, say they support First Amendment rights but not at the expense of public health and safety.

Lee's strategy in dealing with the encampment has often contradicted what he has said, especially as the San Francisco camps have grown to include homeless people not directly involved in the demonstrations.

Fire chief's assessment

San Francisco Fire Chief Joanne Hayes-White, who has been closely monitoring the situation, was more direct in her assessment and said the camp should be cleared out.

"In my opinion, it's an unsafe and an unhealthy situation, and it's escalating," Hayes-White said.

She said that authorities have seen firsthand or responded to reports of fistfights and other acts of violence, alcohol consumption and improperly discarded human waste. Tomas Aragon, the city's health officer, said there has been an influx of people with mental illnesses and substance abuse problems, and one person camping there was found to have lice.

"The city's bottom line is that there are health and huge safety concerns," Hayes-White said.

Lee ordered San Francisco police to clear out a small sidewalk encampment on Market Street between Spear and Steuart streets in the Financial District in the predawn hours Wednesday - less than 12 hours after he told reporters no raid was imminent.

Officers in riot gear approached the three locations of the Occupy camp at about 1:20 a.m. Police dismantled 15 tents and arrested seven people.

Lee's spokeswoman, Christine Falvey, said that Lee was referring only to the encampment at Justin Herman Plaza when he said no action was planned.

Later Wednesday, city officials told demonstrators camped out in front of the Federal Reserve Bank on Market Street that they were there illegally.

For weeks, Lee had insisted that the city had a zero-tolerance policy for tents. Early last month, police raided the encampment to take down the tents. But according to the printed list of conditions, which Falvey said was first given to Occupy SF organizers about two weeks ago and redistributed Wednesday, protesters are allowed up to 100 small tents. Public works crews said they counted nearly 200 tents late Tuesday.

Public Works Director Mohammed Nuru, who toured the grounds Wednesday afternoon, said it appeared that some tents had been removed, and that blocked pathways had been cleared.

"We still have a number of concerns, but at the same time, we have seen some level of improvements," Nuru said.

On his visit, he went over the list of conditions with camp representatives: No more than 100 small tents and no more than 200 campers at time will be allowed; no other structures can be erected; city inspectors must be allowed access; the area must be kept clean and accessible for regular steam-cleaning and garbage pickup; and drinking water must be in individual, shatter-resistant bottles.

No cooking

Also on the list: Portable toilets must be serviced regularly; no hot food can be prepared at the camp; no alcohol or illegal drugs can be sold, distributed or consumed at the encampment; no ropes or cables can be attached to poles or trees; no stoves or open flames are allowed; and walkways must be kept clear at all times.

Jerry Selnes, a representative of the Justin Herman Plaza encampment who met with the mayor and other officials at City Hall, said that demonstrators have been working "in good faith" to address the health and safety concerns raised by the city.

But, he said, "mixed messages" have been coming from city officials for weeks, and even at Wednesday's meeting.

"We try to respond immediately to any concerns," said Selnes.

This article has been corrected since it appeared in print editions.