BEIRUT - Lebanese army troops deployed on Thursday in a Christian village following a deadly shootout there the previous evening between residents and members of the Shi'ite group Hezbollah.

A Hezbollah member and a Christian resident were killed in Wednesday's exchange of fire in the village of Kahaleh, near Beirut, in an incident that began when a Hezbollah truck carrying ammunition turned over while driving through the area.

It was the deadliest confrontation between the Iran-backed Hezbollah and Lebanese who oppose it since clashes in Beirut two years ago, further rocking the stability of a country already suffering deep political and economic crises.

On Thursday, about 10 army vehicles were deployed around Kahaleh, including at the town's main roundabout near a church whose bell had tolled through the night after the clash.

The army was leading efforts to calm the situation, according to representatives of Hezbollah and the Lebanese Forces (LF), a Christian faction that is opposed to Hezbollah and has a political presence in the Kahaleh area.

"Tensions were very high last night and they're still high today," Nazih Matta, an LF lawmaker for the Aley region, told Reuters.

He said residents did want to have an armed reaction to the clash, but "we're sitting on a ticking time bomb".

HIGHWAY FLASHPOINT

Lebanon has been suffering a four-year-long financial collapse that has marked its most destabilising episode since a 1975-90 civil war. It was caused by decades of corruption and profligate spending by ruling politicians.

Hezbollah, founded by Iran's Revolutionary Guards in 1982, is Lebanon's most powerful group. Its arsenal has long been a point of conflict in Lebanon, where its opponents accuse the group of undermining the state.

The two sides have accused each other of starting the shootout, which erupted after people gathered around the truck which turned over on a tight bend on the highway linking Beirut to the Bekaa Valley and onwards to Syria.

The Hezbollah member killed in the violence, Ahmed Qassas, was given a military funeral in the southern suburbs of Beirut, his coffin draped in Hezbollah's yellow flag.

"We will not be dragged into strife, and we will not achieve the goals of those who want to take the country into strife," Hezbollah cleric Sayyed Ali Fahs said during the funeral.

Hezbollah men had been attacked in a "flagrant aggression", he said.

The local office of the LF accused gunmen who were accompanying the vehicle of firing at civilians, leading to the death of local man Fadi Bejjani, 64.

"This state doesn't belong to us. My dad is gone and nothing will bring him back," his son, Youusef, told Reuters.

Mohammad Afif, head of Hezbollah's media office, said the army "played a big role in calming things down" and the ammunition that had been on the truck was in army custody.

(Additional reporting by Ahmad Al Kerdi and Mohamed Azakir; Writing by Tom Perry; Editing by Alex Richardson and Angus MacSwan)