World Bulletin/News Desk

Militants have mostly withdrawn from a Lebanese border town they seized at the weekend, taking with them captive Lebanese soldiers, militant and security sources said on Thursday, and a truce to end the deadly battle appeared to be holding.

Muslim clerics who had been mediating an end to five days of fighting in Arsal said they would negotiate for the release of remaining captives held by militants whose incursion into Lebanon marked the most serious spillover of Syria's three-year-old civil war into Lebanese territory.

Dozens of people have been killed in the battle between the army and from groups including the Islamic State, which has seized large areas of territory in Iraq and Syria.

"The withdrawal happened at dawn, with the hostages," one of the withdrawing militants told Reuters by telephone. "They could be released later in stages." A security source confirmed the militants had taken the captives with them.

The dead include 17 Lebanese soldiers. A Syrian doctor in Arsal put the total civilian death toll at 42, while security sources have reported dozens of fatalities among the militants.

Security officials say 19 soldiers are still missing, presumed taken by the militants when they attacked Arsal on Saturday in what the army described as long-planned attack. More than a dozen policemen were also taken captive.

The mediators from the Muslim Clerics Association on Wednesday secured the release of three of the soldiers.

"We can confirm that the town is almost free of (the militants)," said one of the mediating clerics during a televised news conference speaking on the outskirts of the town.

"Within hours everything will be over."

The taking of Arsal was the first major incursion into Lebanon by militants - leading players in Sunni-Shi'ite violence unfolding across the Levant - which threatens the stability of Lebanon by inflaming its own sectarian tensions.

Arsal is a Sunni Muslim town at the border where tens of thousands of refugees have taken shelter from the war in neighbouring Syria. Their refugee camps have been badly damaged in the fighting, Syrian activists have reported.

A Lebanese security source said the militants appeared to be pulling out gradually, but the army was still assessing the situation. A Lebanese political source familiar with the situation on the ground said some of the militants were still in the town, including Islamic State fighters.

Advancing soldiers found three policemen alive and well at a clinic in the town on Thursday, a security official said.

The Red Cross was able to enter the town on Thursday and recovered 35 wounded civilians, the source said.

The battle in Arsal, a predominantly Sunni Muslim town, has triggered unrest in other parts of Lebanon. A bomb exploded near an army patrol in the northern city of Tripoli, also predominantly Sunni, killing one person and wounding 11 on Wednesday evening, security sources said.