BEIRUT, Lebanon (CNN) -- Gun fire broke out in downtown Beirut on Thursday after Hezbollah leader Hassan Nasrallah said recent government actions amount to "a declaration of open war."

Government loyalists add tires to a burning barricade Thursday outside Beirut, Lebanon. more photos »

There are reports of open street battles in at least one neighborhood. Video showed people throwing stones at each other, as Lebanese soldiers used tear gas to disperse the crowds.

The violence is limited to Beirut's Shiite and Sunni neighborhoods and has continued into the evening hours.

Shortly after Nasrallah's speech, CNN's Cal Perry reported from Sodeco Square in downtown Beirut during an intense gun battle.

"Just in the past few minutes ... things have gotten a lot worse," he said, taking cover with the Lebanese army. He said government forces have not reacted to the violence. Watch Perry call in through gunfire »

The Lebanese army, which is charged with trying to keep peace in the capital, is in a precarious position, Perry explained.

"When you're talking about this much gunfire, when you're talking about [rocket-propelled grenades] fire, it's absolutely ludicrous to think that the army will put themselves between these two factions," he said.

Video of the scene showed empty streets and shuttered stores. There were no reports of violence in Beirut's Christian neighborhoods. Witnesses and journalists described a long line of cars on the main road leading out of Beirut after the violence broke out.

In his televised speech, Nasrallah offered harsh words for the government, blaming it for declaring war by banning Hezbollah's telecommunications system.

"We believe the war has started, and we believe that we have the right to defend ourselves," the Hezbollah leader said. "We will cut the hand that will reach out to the weapons of the resistance, no matter if it comes from the inside or the outside."

He explained that Hezbollah's unmonitored telecommunications system, which the government recently deemed illegal, is "the most important element for the resistance."

Nasrallah called on the government to "withdraw their decisions, and there would be no war."

Late Thursday, Hezbollah's television outlet announced that the organization had rejected calls by the leader of the ruling parliamentary bloc for talks led by a new president.

Lebanese parliamentary majority leader Saad Hariri blamed Nasrallah for "starting a new round of horror" and called on the army to intervene.

The latest tensions between Lebanon's U.S.-backed government and Hezbollah were sparked Monday when the government declared Hezbollah's communication system illegal.

The same day, the government fired the head of Beirut airport's security, Brig. Gen. Wafik Shoukeir, amid its investigation into allegations that Hezbollah had installed cameras and other monitoring equipment at the airport.

Hezbollah viewed Shoukeir's dismissal as another confrontation by the Sunni-led government against the Shiite militant group's authority.

The government believes that Hezbollah was using the equipment to keep tabs on anti-Syrian government officials, possibly funneling the information to Syria. Syria has been accused of carrying out assassinations on anti-Syrian Lebanese politicians, a charge it vehemently denies.

Hezbollah has been blamed for using Wednesday's labor strike, planned to protest low wages, as an excuse to take to the streets of Beirut to protest the government's crackdown on its telecommunication system.

The strike quickly turned into a flashpoint over Lebanon's 17-month-old political crisis. Watch what touched off the fighting »

Hezbollah supporters continue to block all the roads leading to Beirut's airport, forcing the cancellation of nearly all incoming and outgoing flights. The airport is strategic for Lebanon, which is wedged between Syria and Israel, because it is the only way into and out of the country for many people. Watch soldiers, burned cars in streets »

In his speech, Nasrallah argued that Hezbollah's telecommunications system is a weapon that is legal under the Taif Agreement, which ended Lebanon's civil war in 1989. That agreement called for the disarmament of all militias except for Hezbollah because of its role as a resistance group against the Israeli occupation, which ended in 2000.

Hezbollah sees the Lebanese government's ban of its communication system as a pretext for arresting its members. Nasrallah said the secure line of communication allowed Hezbollah to thwart Israeli forces during the 36-day war in 2006

"As a resistance, we don't have a big budget like the United States and Israel," Nasrallah said. "When we need to face them and their high technology, we need to have the simplest means of networking."

CNN Senior Arab Affairs Editor Octavia Nasr contributed to this report.

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